WELCOME TO THE SPRING 2018 ISSUE OF
Agricultural Brief
IN THIS ISSUE
Using S116 of the Highways Act 1980: The end of the road... Marcia Grice A bit of structural engineering Tom Verrill Registering trusts with HMRC Katherine Webber Effective debt recovery and the new pre-action protocol Emma Albins Riparian ownership Ruth Lambillion
Changes to the PSC regime Andrea Curtis Shoot beaters and pickers up: what is their employment status? Jeanette Wheeler This land is my land Imogen Grainger Agricultural partnership disputes on the increase Rob Tiffen
2 Agricultural Brief SPRING 2018
Welcome to the spring 2018 edition of Agricultural Brief
James Dinwiddy Partner 01473 406375 james-dinwiddy@birketts.co.uk
It has not been an easy start to the calendar year. Quite apart from the omnipresent shadow of Brexit negotiations and concerns about what the outcome will be for the farming industry, we have been faced with a couple of months' extreme weather and the increasingly troubled global political picture. All these matters are outside our control, which makes them all the more unsettling. I suggest that the best way to tackle this feeling is to take charge of those matters we can control. As well as making us feel better, the result will be businesses which are better prepared for whatever the future throws at us.
Unless a business is well structured it will not perform at its best, and the taxman may end up with more than his share of the returns. It is also less likely to be resilient in the face of external setbacks. Tom Verrill writes in these pages about a number of the common structures and their characteristics.
The most valuable asset for a landowning farming business is usually the land. A considerable amount of farmland remains unregistered at the Land Registry. Imogen Grainger writes below about the risks and uncertainties which go with unregistered land, and recommends that owners of unregistered land consider a voluntary first registration.
I hope these and the other articles in this edition give you food for thought. As ever, please get in touch with the authors or your usual Birketts contact for further information. We look forward to helping you make sure that your businesses are in the best of health.
Finally, a reminder that with the advent of GDPR we need you to opt in before we can send you future editions of Agricultural Brief. Please visit our website to do so www.birketts.co.uk/register.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
3 Agricultural Brief SPRING 2018
Using S116 of the Highways Act 1980: the end of the road...
Marcia Grice Rights of Way Executive 01603 756465 marcia-grice@birketts.co.uk
The process involves an individual making an application to the Magistrates' Court, via the highway authority, for an order on the grounds that the highway is `unnecessary'.
Asking where the road is may seem fatuous. After all, it's obvious isn't it? It's the tarmac bit, populated with white lines, street lights and signage and probably roadworks. But is it always obvious? What about the rural lane without any clear boundary between it and the field? What about wide verges? Or the grassy area on the corner outside next door's hedge? Exactly how far does the highway go and how do we know? Suppose it's been neglected by the Council, but mowed by a neighbour or perhaps it has completely lost its physical identity and become part of someone's garden: can it still be highway? Asking where the road is on these occasions is actually very sensible: if it is no longer in use as public highway it could perhaps be used for another purpose as future garden or for development one day.
There is a well-known highways maxim `once a highway, always a highway', telling us that the highway does not cease to be highway if it is not used, or if it is enclosed or if it simply no longer has the character of the highway. Highway land remains public highway until it is stopped up by a legal event. Highway authorities hold records of the extent of the publically maintainable highway and produce plans of highway land in response to enquiries. This information is the starting point for anyone wishing to establish the extent of the highway with a view to removing highway rights from land.
The next step is to turn to S116 of the Highways Act. This legislation envisages that there will be circumstances when highways are no longer needed by the public and it enables such highways to be stopped up by means of a statutory order. The process involves an individual making an application to the Magistrates' Court, via the highway authority, for an order on the grounds that the highway is `unnecessary'. The assessment relates wholly to public need or rather lack of need for the land to remain highway. Any benefit to adjoining landowners or other parties is not a relevant consideration.
As with any process affecting public rights, there is consultation and opportunity for objectors to establish their opposition. It is not inevitable that the highway authority will agree to apply to the court, and powers of veto exist for Parish and District Councils. Costs are passed to the applicant.
Consideration also needs to be given to the future ownership of the land. Removing highway rights does not transfer any title to the subsoil to any new party. However, if ownership is already established, or can be by possession over subsequent years, it can bring certainty and will free up what may be very useful land for other purposes in the future.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
4 Agricultural Brief SPRING 2018
A bit of structural engineering
Tom Verrill Associate 01473 406333 tom-verrill@birketts.co.uk
It's vital to remember that the label attached to an arrangement is not determinative as to its nature.
The uncertainty and risks to profitability posed by the ongoing Brexit negotiations have prompted a number of our farming clients to review their business structures in an effort to control the `controllables' and prepare for whatever the final deal has to offer. Collaboration could prove key in post-Brexit Britain and this article aims to provide a very brief summary of some of the options open to landowners and farming businesses.
Contract farming
What is it? A landowner engages a contractor to provide labour and machinery for the landowner's farming business. The services will generally be provided in return for a fixed payment per hectare and often a fixed percentage share of the net profit.
Who contributes what? The landowner provides land, buildings and any fixed machinery and the contractor provides the machinery and labour.
Who bears the risk on the crop? Largely the landowner, who has fixed costs and no guaranteed income, but the contractor is exposed to the extent of his or her share of the net profit.
What's the tax position? The landowner is running a farming business for income tax and capital gains tax (CGT) purposes and remains in occupation running a trading business for inheritance tax (IHT), agricultural property relief (APR) and business property relief (BPR) purposes. The contractor runs a separate contracting business.
Share farming
What is it? Broadly similar to a contract farming agreement but the landowner may be much more involved in the day-to-day running of the farming operations, working alongside the share farmer rather than simply engaging him or her to provide certain services. The underlying notion is that the contributions of each party are different but complementary.
Who contributes what? Generally, the landowner contributes the land, buildings, fixed equipment and machinery with the share farmer providing labour and working machinery. Both parties provide their own expertise and are responsible for their own accounts and tax returns.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
5 Agricultural Brief SPRING 2018
Who bears the risk on the crop? Both parties. The input costs and the produce of the farming enterprise will be split between the parties in agreed proportions, depending on the relative contributions of each party. What's the tax position? Landowner and share farmer each operate their own separate farming business for Income Tax and CGT purposes. The landowner remains in occupation of the land and engaged in a trading business for the purposes of APR and BPR.
Farm business tenancy
What is it? A landowner leases land and (if applicable) buildings to a tenant farmer. The tenant farms the land for the purposes of their own farming business. Who contributes what? The landowner leases the land, buildings and fixed machinery to the tenant. The tenant provides machinery and labour. Who bears the risk on the crop? The tenant. The landlord receives the rent specified in the FBT and the tenant retains all the produce of his or her farming enterprise. What's the tax position? The tenant carries on the farming business for Income Tax and CGT purposes. The landlord is not the occupier of the land for the purposes of APR but may still be eligible for relief if he or she can satisfy the seven year ownership condition. No BPR will be available.
Partnership
What is it? Two or more farmers jointly carry on a single farming business.
Who contributes what? This is very flexible and the terms of the partnership agreement may provide for certain partners to deal with the day-to-day running of the business while others may take a back seat. Partners may contribute land to the partnership or retain personal ownership. The partnership may also farm land owned by third parties.
Who bears the risk on the crop? Partners share profits and losses in accordance with the shares set out in the partnership agreement. In the absence of express agreement, these shares will be equal.
What's the tax position? The partnership is transparent for tax purposes and so each partner is responsible for his or her own income tax and capital gains tax. A landowning partner will still be able to be eligible for APR and BPR where the land is introduced into the partnership and a reduced rate of BPR where the land is used by or let to the partnership.
It's vital to remember that the label attached to an arrangement is not determinative as to its nature. Should HMRC or a court ever scrutinise an arrangement, it will be the substance of what's happening `on the ground' and not the form of the document which provides the final word on the nature of the arrangement. It's not uncommon, for example, for an arrangement that's labelled as a CFA to drift into landlord and tenant territory, with all the (often unintended) consequences that flow from it.
Take care to review all your business structures regularly and remember that if the substance says one thing and the form another, then the substance wins out. If you're concerned that an arrangement may be morphing into something unexpected speak to your advisers early. You can then ensure that you're aware of any consequences that flow from the new arrangement and that you're adequately protected against any risks posed, particularly the risk that valuable tax reliefs may be jeopardised.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
6 Agricultural Brief SPRING 2018
Registering trusts with HMRC
Katherine Webber Trust and Tax Executive 01473 406362 katherine-webber@birketts.co.uk
From now on, trusts must update the register at least annually, even if only to confirm that there are no changes.
The 4th Anti-money Laundering Directive has been filtering into the press on a number of topics as it affects large swathes of our financial transactions, even if we are not directly aware. The directive focuses on the beneficial owners of funds, be that cash or assets.
In the tax arena, this has led to a major change in the compliance required of trusts and deceased persons' estates in the UK. All trusts with a UK tax consequence, including Income Tax, Capital Gains Tax and Inheritance Tax, are required to register electronically with HMRC. Until now registration was accomplished by correspondence with HMRC and relatively straightforward.
The register was made available to agents in October. All trusts that have not previously been registered must be registered by 5 October following the tax year in which they first have a tax consequence. All pre-existing trusts, even where already registered with HRMC, must complete the electronic registration process by 31 January 2018.
From now on, trusts must update the register at least annually, even if only to confirm that there are no changes. The penalties have yet to be confirmed for non-compliance but they will be implemented by HMRC in due course.
Certain deceased persons' estates are also required to register, where they are regarded as complex.
Access to the register will be restricted to HMRC and law enforcement agencies at present. There are no current plans to make the register available to the public perhaps just as well after a huge backlash when the equivalent French register was briefly made public before being suspended and ultimately made private. The motivation for the legislation is to reduce risk of money-laundering and in turn reduce fraud and terrorist financing.
We will be writing to parties connected to trusts and estates under our administration to obtain or confirm details required for the register. Some of these questions may feel rather personal you probably would not expect to provide your National Insurance number or date of birth when acting as a trustee. We appreciate that this may be unpalatable to some, but unfortunately it is a fact of modern life that we are increasingly reported on and monitored.
Where we do not administer a trust, that will not prevent us assisting with the online registration. For further information, please contact the Trust Tax Team.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
7 Agricultural Brief SPRING 2018
Effective debt recovery and the new pre-action protocol
Emma Albins Associate 01473 406302 emma-albins@birketts.co.uk
Creditors must therefore make sure that they keep on top of the process and consider taking preventative measures to minimise the possibility of bad debt accruing.
Contractual relationships in the agricultural industry are often long-standing so it is all the more important to manage debt effectively in order to sustain those key relationships. Effective debt management is also important to avoid the creation of a vicious circle whereby a creditor, if not paid in a timely fashion by its debtor, can suddenly become a debtor itself, unable to pay its own creditors. This can detrimentally affect a business' credit scores, in turn impacting negatively on vital relationships with suppliers.
Figures published by the Registry Trust show that the number of Judgments registered against consumers in the first quarter of 2017 increased to a 10 year high. In a bid to improve debt management the Government has introduced a new protocol (applicable from 1 October 2017) for businesses, including sole traders, to follow before issuing a claim against an individual or sole trader debtor. The new debt recovery protocol can be found on the government's website at: https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/ protocols/pre-action-protocol-for-debt-claims.pdf. Other business to business debts continue to be dealt with under the practice direction on pre-action conduct.
The new protocol requires the creditor to provide a response pack with the letter of claim and to give the debtor 30 days in which to respond. The next step depends on the response, if any, received from the debtor. A failure to comply with the protocol can result in costs or interest sanctions.
In conclusion, for those agricultural businesses dealing with debtors who genuinely wish to pay and simply need time and further information before doing so the protocol may work well in producing a commercial and cost effective resolution whilst maintaining the contractual relationship. However, it may be open to abuse by unscrupulous debtors simply looking to delay payment further. Creditors must therefore make sure that they keep on top of the process and consider taking preventative measures to minimise the possibility of bad debt accruing. Such measures could include regularly reviewing customer's credit checks and limits, for example if providing agricultural products on credit, and engaging with the new debt recovery protocol procedure at an earlier stage.
Birketts has a dedicated Debt Recovery Team ranked in the top tier of the Legal 500 and described as offering "an excellent level of service".
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
8 Agricultural Brief SPRING 2018
Riparian ownership
Ruth Lambillion Associate (Legal Executive) 01223 326591 ruth-lambillion@birketts.co.uk
A riparian owner has the benefit of certain rights not necessarily contained in the title deeds to the property but established by common law.
If a natural non-tidal watercourse such as a river, stream or ditch passes through, under or along a property boundary the landowner is, subject to certain exceptions, a riparian owner. The beds of tidal rivers vest in the Crown and if there is an artificially created watercourse ownership is likely to belong to a third party.
As to the degree of riparian ownership, there is a rebuttable presumption that if a property boundary is marked by a natural watercourse ownership extends up to the middle line of the bed. Where land on opposite sides of a watercourse is in different ownerships, each landowner will be a riparian owner up to the centre line of the bed from their property. If a watercourse passes through one landowner's property, the presumption is that the landowner takes ownership of the whole extent of the watercourse bed as far as it runs through their land.
If you are considering the extent of your riparian ownership you should check your title deeds. There may be provisions noted showing ownership vesting in a third party, or restricting the extent of ownership if a wall or hedge runs along the watercourse and forms the boundary instead.
A riparian owner has the benefit of certain rights not necessarily contained in the title deeds to the property but established by common law. It should be noted that such rights can be affected by other laws.
There is a right to receive a flow of water in its usual natural quantity and quality.
Subject to the volume used and the need for an abstraction licence, a riparian owner can use water from the watercourse for certain but not all purposes on their land. For example use of the water for agricultural purposes does not permit use for spray irrigation.
A riparian owner may not take water from a watercourse to such an extent that the supply of water to those downstream who require it is reduced.
A riparian owner may protect property from flooding and the land from erosion.
Usually a riparian owner has the right to fish in their part of the watercourse but a fishing rod licence must be obtained from the Environment Agency. However sometimes fishing rights may have been granted separately to a third party by way of a lease, deed of grant or licence is there anything with the title deeds?
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
9 Agricultural Brief SPRING 2018
Consent may be necessary should a riparian owner wish to discharge any water or sewage into the watercourse.
As for responsibilities, if you are a riparian owner you should be aware of the following.
A riparian owner must accept the flow of water from their upstream neighbour and must allow it to pass and flow through their property to neighbouring downstream riparian owners without any pollution, obstruction or diversion so that the normal water flow is not hindered.
Fish must be allowed to pass freely through a watercourse. If a riparian owner wishes to build a structure abutting or on a watercourse which may affect the free passage of fish there could be a statutory requirement to install a fish or eel pass or screen.
A riparian owner must accept flood waters onto their land. This is the case even if the flood is as a result of insufficient capacity downstream. A riparian owner has no obligation to make improvements to the drainage capacity to that part of a watercourse in their ownership.
The owner must maintain the banks and beds of the watercourse along with any trees or shrubs growing on them so that there is no increased flood risk to the land or to a neighbouring riparian owner's property. Any approved structures such as culverts or weirs must also be maintained. Failure by a riparian owner to comply with their maintenance responsibilities can result in a notice being served requiring the work to be carried out. If it is still not carried out, the relevant body can go on to the riparian owner's property to carry out the work and charge them for doing so.
Debris and litter should be cleared even if it did not originate on the riparian owner's land.
The Environment Agency must be allowed access to a watercourse in order to carry out flood risk management work. They have statutory powers of entry if access is refused.
Finally before any work is carried out on or near a watercourse (other than general maintenance), be it for flood protection, building a structure or making alterations to the watercourse itself, you must consider whether you need any consents from bodies such as the Environment Agency, local authority and/or internal drainage board. Action can be taken against a riparian owner where unauthorised work has been carried out.
In summary, riparian ownership comes with a mix of rights and responsibilities, some obvious but some rather less so. These rights and responsibilities may be affected by matters contained in your title deeds.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
10 Agricultural Brief SPRING 2018
Changes to the PSC regime
In our last issue, we reported to you on the Persons of Significant Control regime. As a reminder, since 6 April 2016 the vast majority of UK companies and UK limited liability partnerships (LLPs) have been required to maintain a register of all those persons who have significant control over the company or LLP. Some significant changes to the PSC regime came into force on 26 June 2017.
What are the key changes?
In summary the key changes are:
1. AIM companies are now subject to the PSC regime
2. the PSC regime has also been extended to other entities including Scottish limited partnerships and certain general Scottish partnerships
3. new 14 day timelines now apply both in relation to updating an entity's own PSC register and in updating the central PSC register at Companies House
4. the Confirmation Statement is no longer the vehicle for updating PSC information at Companies House.
Frequency of PSC register updates
Entities required to keep a PSC register must now:
1. update their PSC register within 14 days of either a PSC confirming his/her details (for individuals) or the entity obtaining the relevant information (for relevant legal entities)
2. notify Companies House of the changes to its register within 14 days of the change being made to the entity's own register. This replaces the old system where the information was supplied to Companies House annually on the Confirmation Statement (CS01).
Companies House forms and PSC
All notifications to Companies House regarding PSC information (including changes to such information) must now be submitted on Companies House forms PSC01 to PSC09. This replaces the previous requirement to provide this information annually via the Confirmation Statement (CS01).
Other developments
Companies House has recently issued a statement confirming that a PSC Compliance Team is now in place. The PSC Compliance Team will be contacting companies who have yet to file any PSC details at Companies House as well as alerting other companies where the information filed is clearly wrong. It is therefore essential that all entities which are subject to the regime take immediate action to comply with it if they have not done so already. There are criminal sanctions for non-compliance.
Need further information on PSC?
If you require any further information in relation to the matters mentioned in this article please contact Andrea Curtis.
Andrea Curtis Senior Associate
01245 211351 andrea-curtis@birketts.co.uk
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
1 1 Agricultural Brief SPRING 2018
Shoot beaters and pickers up: what is their employment status?
Jeanette Wheeler Partner 01603 756427 jeanette-wheeler@birketts.co.uk
The tribunal will look at the overall picture of the arrangement between the parties, and what happens in practice rather than relying on the terminology used or the provisions included in any relevant documentation.
The answer to this question is far from straightforward and will depend on the arrangements in place on each estate. It is important to understand which employment status individual beaters and pickers will attract because of the legal obligations and the associated rights that arise as a result. Read on... because getting it wrong can be very costly.
Defining employment status
Employment law recognises three separate categories of individuals: employees, workers and the genuinely self-employed independent contractor, each attracting separate rights and responsibilities. In a nutshell, an employee works under a contract of (personal) service whereas a self-employed independent contractor works under a contact for the provision of services. The definition of `worker' lies between the two and reflects the fact that some individuals do not reach the high threshold of employee status but are nonetheless entitled to some protection under employment law.
Why is status so important?
The employment status of an individual determines the rights to which they are entitled and the obligations that flow from those rights. Key rights to which workers (just like employees) are entitled include the following:
to be paid at the appropriate rate of the national minimum wage for the hours they work (currently 7.50 per hour for those aged 25 and over)
protection under the working time regulations, including rest breaks and paid annual leave
protection against discrimination and harassment under the provisions of the Equality Act 2010.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
1 2 Agricultural Brief SPRING 2018
The beaters/pickers that work on my shoots must be self-employed... right?
Many landowners retain beaters/pickers on the assumption that they are self-employed or `casual', but in practice they may be more properly regarded as workers (as we have seen in the recent `gig economy' series of cases) or even as employees. It is important to remember that the label you give to the individual, or which they give themselves, is not determinative of their employment status; nor is the HMRC status of the individual for tax purposes determinative of their legal status.
There is a fine line distinguishing workers and self-employed contractors. When an employment tribunal is asked to decide the status of an individual, they will take into account a whole range of factors. For instance:
Is the individual expected to personally beat or pick? In essence, once the individual has agreed to work on a particular shoot, are they required to attend themselves or are they able to send someone in their place? A requirement to provide personal service is indicative of worker status.
Is the landowner a client of the profession carried on by the beater/picker? If so, this is indicative that the individual is a self-employed contractor. It might be easier to argue this is the case for some pickers if, for example, they supply their own transport and equipment and use their own dogs. It is much less likely, however, that the landowner will be a client of the beater. In the recent Uber case brought by taxi drivers who were trying to establish `worker' status, the tribunal rejected the argument that Uber was a client or customer of the business carried on by each individual driver. It found the drivers to be `workers' (this decision has been appealed).
How much control does the landowner exert over the beater/ picker? Generally speaking, the more control a landowner exerts the more likely it is that the individual will be regarded as a worker. Control over elements such as uniform, hours of work and when breaks can be taken are amongst the factors that the tribunal will look at.
The tribunal will look at the overall picture of the arrangement between the parties, and what happens in practice rather than relying on the terminology used or the provisions included in any relevant documentation.
What happens if I get it wrong?
If you are treating a worker as self-employed (without deducting tax) and HMRC decides that this is the wrong classification for tax purposes, you will be liable for the underpayment of income tax and national insurance contributions. Further, failing to pay a worker the national minimum wage could land you with a substantial fine as well as back payments. Workers can bring claims in the employment tribunal for underpayments of the national minimum wage and for unpaid holiday pay (going back two years).
Watch this space...
The topic of employment status is currently being hotly contested in the courts. The Employment Appeal Tribunal's judgment in the Uber case is expected soon and the Pimlico Plumbers case is due to be heard by the Supreme Court early next year. Recent decisions have generally been in favour of finding worker status, so these upcoming judgments are awaited with interest. In the meantime, if you are concerned about the status of the beater/pickers you retain and your obligations towards them, please get in touch.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
13 Agricultural Brief SPRING 2018
This land is my land
Imogen Grainger Solicitor 01473 406307 imogen-grainger@birketts.co.uk
[The] Land Registry offers a reduced registration fee if the application is voluntary rather than compulsory first registration having been `triggered' on a sale, for example.
Despite what I was repeatedly told at university, a surprising amount of land remains unregistered with the Land Registry. It's not often that you are able to look back on your academic studies and say "they were wrong" rather than "I wish I'd listened more".
Practically speaking, unregistered status means that the only evidence of ownership of the land is recorded in the deeds to the property. This can be problematic for a number of reasons: there is no secure record of who owns the land, providing opportunities for people to make false claims to land or parts of it; boundaries are often uncertain and undefined; there is no `one stop' to determine what rights affect the land; and it is also inevitable that many deeds and documents have become lost over time or remain in that `safe place somewhere' resulting in gaps in the documented history of the land.
Voluntary first registration will help avoid the above. What may be most attractive is that the Land Registry offers a reduced registration fee if the application is voluntary rather than compulsory first registration having been `triggered' on a sale, for example. Most importantly, however, it allows us to have a conversation with you as the owners of the land regarding the property. If there are any gaps in the documentation (or no documentation has ever been prepared), we can discuss these with you in order to try to fill in these gaps and ensure an accurate record is made using the knowledge of those who know the property best. The result of registration is that all matters affecting your property are recorded in one place.
I often have to deal with unregistered land following the death of the owner. Their priceless knowledge of the land and how it has been used and developed over their years of ownership and, often, their family before them is lost. As a result, piecing together the extent and history of the land become more difficult, time-consuming and expensive.
For all these reasons I suggest that where you own unregistered land you should consider digging out your deeds and discussing a first registration application with us.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
14 Agricultural Brief SPRING 2018
Robert Tiffen Senior Associate 01603 756537 robert-tiffen@birketts.co.uk
Agricultural partnership disputes on the increase
Our Disputes Team has noticed a distinct increase in the number of partnership disputes taking place in the sector. Traditionally these disputes arise from different parties being in a partnership, often a partnership operating without any kind of partnership agreement being in place. Where there is no partnership agreement, the partnership, and in particular the relationship between the partners, is governed by the terms of the Partnership Act 1890. This act includes some provisions that can be very dangerous for a business (such as being able to dissolve the partnership simply by giving notice).
But not only are we being instructed on more of the usual partnership disputes, but we are particularly seeing an increase in partnership disputes arising from the breakdown of a relationship. We have seen an increase in the number of couples, both married and unmarried, that are running farms or other agricultural businesses together, falling into a partnership dispute as their relationship ends. This is not just messy for them emotionally, but legally as well, particularly if there is no partnership agreement in place or if any partnership agreement has not been kept up to date.
So what does this mean? It is a timely reminder that partners in a partnership really should think carefully about formalising their relationship to ensure that there is clarity and simplicity about what happens if the relationship unfortunately comes to an end. And if you are in a partnership where the relationship is ending, whether or not you have documentation in place, you should take advice on your position as soon as possible.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
www.birketts.co.uk/agriculture
15 Agricultural Brief SPRING 2018
Agriculture and Estates Team
Birketts' Agriculture and Estate Team of over 50 advisors operate from our Cambridge, Chelmsford, Ipswich and Norwich offices allowing us to service our UK and overseas clients with ease. The team encompasses ecclesiastical law, public access issues, aggregates extraction and management, renewable energy projects, structuring family successions and taxation, as well as mainstream agricultural and property law advice linked to sales, purchases, tenancies, options and development.
Birketts are within their field extremely diligent, polite, helpful, and their attention to detail is second to none.
Chambers UK [2018]
Farm Business Innovation Show 2018, NEC Birmingham, in association with CLA Birketts is sponsoring the show for the first year and hope to see many of you over the two days 7 and 8 November. For more information about the event visit www.farmbusinessshow.co.uk.
Clear Legal Advice Cambridge | Chelmsford | Ipswich | Norwich
Chris Coupland Partner 01603 756489 chris-coupland@birketts.co.uk
James Dinwiddy Partner 01473 406375 james-dinwiddy@birketts.co.uk
Rachel McKillop-Wilkin Legal Director 01223 326580 rachel-mckillop-wilkin@birketts.co.uk
Jack Royall Partner and Head of Agriculture and Estates 01603 756487 jack-royall@birketts.co.uk
Neil Sparrow Partner 01603 756483 neil-sparrow@birketts.co.uk
Sophia Key Senior Associate 01603 756497 sophia-key@birketts.co.uk
Annabelle Rout Associate 01245 211215 annabelle-rout@birketts.co.uk
www.birketts.co.uk/agriculture
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