Making succession a success

It is in the interests of Scottish farming and crofting that we make succession a success writes NFU Scotland Policy Adviser, Lucy McGillivray.

Only a quarter of attendees at NFU Scotland’s Next Generation Group’s recent webinar on succession had a plan in place but the webinar, and the top line up of speakers, has provided the impetus for that process to begin.

Succession isn't just about giving the next generation the opportunity to farm, it's also about ensuring a smooth process for the older generation when handing over. It’s not just about inheriting land; it's about inheriting knowledge and enabling a strong successful future for your business. 

Unfortunately, succession is not a topic that is spoken about enough in the agricultural sector, creating the need for some support and advice on the topic, which we clearly delivered in our webinar held on 1 November. 

The ‘Making Succession a Success’ webinar had an incredible turnout of more than 180 attendees who heard from Ian Davidson, Scottish Land Matching Service; agricultural law specialist Hamish Lean from Shepherd and Wedderburn: Caroline Millar, Cas Millar Consulting and Alex Docherty, Head of Private Client Tax at Johnston Carmichael. 

The panel of expert speakers captivated the audience with advice on how to start on the journey of succession. They covered all bases, from how to manage that initial tricky conversation with family, to technical tips to help with the legality of succession plans. A key takeaway from the webinar was succession should be fair, not equal. 

With almost 100 responses, a short survey of attendees after the event showed that:

  • 100% found the webinar useful. 
  • The majority of respondents felt more informed about succession and how to implement a succession plan. 
  • Only 26 respondents had a succession plan in place.
  • The majority of those who didn’t have a succession plan, are now more likely to start the process of succession. 

These results are positive, in that the webinar has helped raise awareness of the importance of having a succession plan and has even got some people started on that journey. However, it is incredibly worrying the low number of respondents who don’t have any sort of succession plan in place. Therefore, we as a sector have work to do in enabling and supporting families to start having conversations about succession and the future of the business.

Don’t worry if you missed the webinar, we recorded it, and it is now uploaded onto the Next Generation page in the members section of the website here. You will also find many useful resources providing key information about succession, including Hamish Lean’s presentation, and Alex Docherty’s slides with tax advice. 

There is also guidance from the Farm Advisory Service on support available when making your own succession plan. Through using FAS Specialist Advice businesses can benefit from £1,000 to access professional support to help with succession planning. This is tailored to individual business needs; it could be assistance with navigating family discussions; looking at business options; financial or legal advice, depending on what you need.  

We had several great questions during the webinar that we unfortunately ran out of time to answer, so the speakers have kindly answered them below. Please note the answers are not to be relied upon as formal legal advice and that parties seeking advice on their own affairs should always seek appropriate advice from a suitably qualified professional.

Q: How best to split non-farming parts of business {i.e. rental properties etc.) from the farm when one child comes into the partnership/family business to ensure the non-farming siblings get their share without crippling the sibling left to farm, when currently everything is in 'one pot' as just the parents in the partnership?
A: This might be done via setting up a separate partnership or limited company 

Q: What about a farmer who has no family, or no family who is interested in taking on the family business? How can that farmer pass on their skills by supporting a new entrant or someone who wants to scale up, to ensure the farm thrives in the future? How can a Joint Venture enable this type of succession? And at what point should the farmer think about embarking on a Joint Venture?
A: Entering a joint venture arrangement is an excellent way for the farmer to take on the role of mentor such that he passes on not only the technical but also the business skills to the new entrant. In the case where the farmer has family who are not interested in farming themselves but would wish to retain the farm then a joint venture with a new entrant / expander can be a way of securing the future. 

Important that all are involved in any discussions on how this is set up and will operate even after the farmer passes on. Where there is no family an agreement can be put in place that clearly sets out what happens in the event of the death of the farmer. In terms of when a farmer should think about embarking on a joint venture, which is really a decision for the individual / family, but SLMS would advocate not leaving it too late.

Q: Its rather sad to think that if you write a Will, there is still a 'legal rights' process to contest the contents of the Will which goes against the deceased wishes. Which completely goes against the purpose of having a Will in the first instance?
A: Legal rights have existed in Scots Law for some considerable time.  They are claimed against a deceased's moveable estate not heritable estate.  Heritable estate includes land and buildings.  If a deceased was survived by a widow or widow only one third of removable estate is available for a legal rights claim and that one third is divided by the number of children.  If there were three children and one claimed legal rights that share would be equal to one ninth of the moveable estate.  If the deceased is a widow or widower then the moveable estate subject to legal rights is one half of the total and therefore, in the above example the amount of the claim by any one of the three children claiming legal rights would be one sixth being a third of a half.

Q: Are there any standard calculations to establish the value of a lifetime tenancy?
A: A fully secure agricultural tenancy does have a considerable value.  There is no standard calculation to establish its value but as a very broad rule of thumb it can represent a considerable part of the open market vacant possession value of the farm.  Valuation advice should always be sought.

Q: How do you put a value on an agricultural tenancy which is part of a larger agribusiness to allow a fair and reasonable division of assets to the next generation?
A: A secure tenancy might hold a considerable value.  If the family business is conducted via a partnership the partnership agreement could provide that the partner who holds the tenancy is holding it in trust for the partnership and has to account for its value to the other partners.  

Q: How can you ensure succession of a tenancy which is held in the name of a partnership?
A: If the tenant is a partnership, it will not survive a change in the constitution of the partnership.  

Q: If your farm has a standard security on it against a partnership borrowing, does this mean it appears as a partnership asset even although the farm is owned by one partner?
A: This is not necessarily the case because the bank may have required an individual partner to grant a guarantee for partnership borrowing and to grant a Standard Security of the farm as security for the borrowing.  

Q: We have a situation where 2 of the 3 partners live in the ‘big house’ which previously was considered the farmhouse for inheritance tax purposes. Both of these partners are approx. 80yrs and taking a less active role in farm. Partner 3 (the most active farmer) also lives on farm in another farmhouse. Will HMRC consider the ‘big house’ still to be the farmhouse?
A: This is a potentially risky situation.  Business decisions in meetings should be taking place in the farmhouse.  If the older partners retire but still live in the farmhouse that will become particularly problematic.  

Q: If I leave the farm to my son on my death and 5 years later, he decides to sell it, does he only have to pay CGT on the gain since my death rather that the value of the land when I bought it?
A: Correct, he acquires the land at market value on your death. If he sells it, the gain is the difference between value on sale less value on date of death.

Finally, I’d like to thank all our wonderful speakers that made the webinar so interesting and informative! And thank you to all those who attended, the number of attendees demonstrates the need for help and advice when it comes to succession planning. 

The Next Generation group wants to ensure succession is a smooth transition that enables the next generation to continue supporting Scottish agriculture, but the reality is that many farming businesses have yet to put a succession plan in place. Therefore, we will continue to provide support on the topic of succession. Watch this space! 

If you have any questions about the webinar, please get in touch with 

Date Published:

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Making Succession a Success

Industry leading speakers lined up for NFU Scotland Next Generation succession planning webinar on 1 November.

NFU Scotland’s Next Generation group are asking: “Do you want to enable a strong successful future for your business?” 

The group believes succession should be a smooth transition that enables the next generation to continue supporting Scottish agriculture, but the reality is that many farming and crofting businesses have yet to put a succession plan in place.

The Next Gen group has pulled together a panel of leading industry experts for an online seminar, taking place on 1 November at 7pm on how to make succession work for farmers and crofters.  People can register for this open webinar at:

The speakers are Ian Davidson, Scottish Land Matching Service; agricultural law specialist Hamish Lean from Shepherd and Wedderburn: Caroline Millar, sector lead at Scottish AgriTourism and Alex Docherty, Head of Private Client Tax at Johnston Carmichael.  They will inspire thoughts on how to get started with a succession plan, and display some of the great benefits to being prepared for succession for your business. Chair of the Union’s Next Gen group Matthew Steel will steer the webinar. 

Research from leading rural insurer NFU Mutual, published earlier this month, indicated that less than half of farmers have a succession plan, and the percentage hasn’t moved in three years.  A survey of 1,700 farmers from across the UK found under half of farmers (48 per cent) have a succession plan in place.  More than a third (36 per cent) don’t have a plan because they don’t think it’s relevant while 16 per cent admit succession planning is relevant, but they haven’t got round to it.

Matthew Steel, who farms at Craignathro near Forfar, said: “We know there is a lack of succession planning within the farming industry, and this can be a barrier for new entrants in the sector. 

“With tenancies in short supply and land prices as high as ever, it can be a struggle for an ambitious new entrant to make a go of a business venture in the sector. 

“Therefore, NFUS Next Generation Committee has organised a webinar with a panel of expert speakers to help open up the conversation about succession and what this may look like for your farming or crofting business. 

“Succession comes in many forms, whether control is passed down to a family member, or a share farming agreement is arranged, it is important to create and implement a succession plan. That plan will enable you to set out goals for the business, as well as how and who you’ll hand over control to. It’s also your chance to shape the future of the farm or croft and leave a legacy long after retirement.” 

Notes for editors

The ‘Making Succession a Success’ webinar is on Wednesday 1 November 2023 at 7pm.  Attendees are invited to register for the webinar using the link:

  • The speakers are:

    • Ian Davidson, Independent Advisor, Scottish Land Matching Service.  Since September 2019, Ian set up and manages the Scottish Land Matching Service for Scottish Government. SLMS is a free service offering independent advice and facilitation to people considering joint ventures in farming and crofting throughout Scotland.
    • Hamish Lean, Partner and Head of Rural Property, Shepherd and Wedderburn. Hamish is accredited by the Law Society of Scotland as a Specialist in Agricultural Law, and he sits on the NFUS Legal and Technical Committee. In addition, Hamish is a member of the Scottish Agricultural Arbiters and Valuers Association. 
    • Caroline Millar, Sector Lead at Scottish Agritourism and NFU Scotland East Central Regional Chair. Caroline is a farmer from Auchterhouse in Angus and has also run her own business for the past fifteen years supporting farmers to improve their profitability by making best use of their assets. 
    • Alex Docherty, Head of Private Client Tax, Johnston Carmichael Chartered Accountants. Alex specialises in all aspects of tax planning for rural businesses with a focus on providing solutions for her clients through tax efficient structuring. Alex sits on the NFU Scotland Legal & Tax Technical Committee. 


Contact Bob Carruth on 0131 472 4006

Author: Bob Carruth

Date Published:

News Article No.: 61/23

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