I have a client that is making a Will but has had an informal tenancy agreement with her brother to farm some of her land for some years. The client wants to leave the land to her children. What rights does her brother have, if any, in respect of the informal tenancy? Does provision need to be made in respect of the land which is subject to an informal agreement bearing in mind that it is informal in the Will i.e. will the gift be subject to this?
Views would be appreciated.
Graham and Rosen
Any rights the brother has will continue against the estate and children irrespective of what is put in the Will.
The particular rights are a matter of agricultural land law. I suspect an FBT in which case no security of tenure, just the need to provide the appropriate notice to quit.
The type of tenancy may also be relevant to the availability of APR.
Osborne Clarke LLP
The client needs to be advised to formalise the tenancy arrangements to maximise the iht savings and clarify on what basis the brother occupies.
Thanks for your response. My client wants to continue the arrangement without formalising the agreement. As long as they know the issues in leaving it this way then that is all I can do.
Graham and Rosen
At the very least it needs to be established the nature of the tenancy, which will determine the iht relief available and the security of tenure that applies
I note the brother has been “farming the land for some years”.
I suggest it is important to identify when the arrangement with the brother first started as, if before 1 September 1995, it would be governed by the Agricultural Holdings Act 1986 and may not be so easy to terminate. If the client inherited the land and an arrangement with the brother was already in place, the relevant date is likely to be when the brother first entered into an arrangement, not when the client acquired ownership.