INSIGHT SCOTLAND UTILITY CLAIMS. Featured: Planning reforms to support rural Scotland DO YOU KNOW WHAT YOU RE ENTITLED TO? issue 02.

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1 INSIGHT SCOTLAND issue 02 July 2018 Featured: Planning reforms to support rural Scotland Succession planning UTILITY CLAIMS DO YOU KNOW WHAT YOU RE ENTITLED TO? youngsrps 01

2 W New addition to the team e are delighted to announce news of a new addition to our Rural team Laura Stubbings joins the YoungsRPS team with effect from July 2018 to provide key support to Tom Oates and Michael Halliday. Laura, who has a degree in rural land agency, will be a valuable addition working alongside Helen Proud and Jayne Campbell in the future. A very warm welcome to Laura! I m absolutely delighted to be joining the YoungsRPS team and looking forwarded to progressing my career with them. WHEN IT COMES TO LOCAL EVENTS LET S ENJOY THEM TOGETHER THE DIRECTORS AND TEAM AT YOUNGSRPS INVITE YOU TO JOIN US AT BORDER UNION SHOW 27TH & 28TH JULY Springwood Park, Kelso Join us for refreshments at our stand. We hope to see you there. Alnwick Dumfries youngsrps

3 Planning reforms to support rural Scotland Written by Richard Morgan Senior Planning Consultant I n May 2018, the Scottish Parliament voted to agree the general principles of the proposed new Planning (Scotland) Bill. Published at the end of 2017, the draft Bill is the culmination of a series of consultation exercises undertaken over the last few years exploring ways to reform the planning system. It includes a range of measures intended to make the planning process more accessible and efficient. Announcing the publication of the Bill, Minister for Local Government and Housing, Kevin Stewart, proclaimed that this Government is acutely aware of the particular threats to rural Scotland arising from Brexit and the importance of planning as an enabler of development in our rural communities. Planning needs a rethink if we are to realise its full potential as a driver for sustainable growth. It is encouraging that the Government recognises the need for the planning system to be simplified to support new development and facilitate economic growth. Although not wanting to be cynical, these aims are very similar to those of the previous planning reforms in 2006, which suggests the last amendments were unsuccessful. Having worked in Scotland for a number of years, it is hard not to feel that the real issue is not the planning system itself, but rather the anti-change culture and attitude that limits its effective operation. One positive on this front is the proposal in the Bill to impose compulsory training requirements for councillors exercising planning functions and decision making. This should help to improve the consistency of decisions and increase trust in the system. The Bill also introduces Local Place Plans, giving communities the opportunity to prepare a plan to shape the future direction of development in their local area, with a view to delivering more positive planning outcomes. Strategic Development Plans are to be abolished, and Local Development Plans are to be replaced every 10 years, rather than the current five. A third party or equal right of appeal has not been introduced in the Bill; a topic that was heavily debated during the consultation stages of the Bill preparation. The Bill, as currently drafted, leaves much of the detail to secondary legislation, future regulations and planning guidance. It is therefore difficult at this stage to fully appreciate how the proposed changes will work in practice and deliver on its objectives, particularly in respect to development in rural areas. It would be good to see further changes, similar to those introduced over the border, such as the increased flexibility for residential barn conversions and new agricultural buildings without planning permission, and exceptions for new housing at the edge of settlement greenfield sites where it addresses local housing needs. It is at least positive to see the Government acknowledge that a pro-development planning system can play an important role in securing a sustainable future for rural Scotland. With the uncertainty of Brexit, the continual pressure to modernise and the need to adapt to long term climate change, it is an excellent time for farmers and landowners to be considering opportunities to diversify and create additional income streams. If you wish to discuss opportunities for diversification on your farm or would like advice on the planning prospects of a development proposal, please contact Richard Morgan on or richard.morgan@youngsrps.com youngsrps 03

4 Succession planning By assessing who owns what, what are the main assets and any debt or borrowing arrangements, long term plans can be better formulated. Written by Tom Oates Director M any family run farming businesses involve several generations of the same family. This tends to make the question of succession a thorny one. If business growth and secure family relationships are to be maintained, it s a discussion best had sooner rather than later. Because it is a discussion no one wants to have, families may think they have a clear view of how they see the business continuing in the hands of the next generation, but never get around to discussing it. Many years ago, I heard of a situation with a major business owner from Manchester. He thought that his daughter, who was a London based lawyer, didn t want to take over the family business. Likewise, the daughter didn t think her father wanted her involved because neither of them had been brave enough to have the conversation. As a result, the father was on the verge of selling out, losing not only the business but all the family history which went with it, but for a chance conversation with his daughter. It turned out she was delighted to be able to return home and take over the reins and her father was equally delighted with this outcome. Successful succession planning has to question the natural tendency for parents to want to treat all their children equally and divide assets in accordance with this wish. Equal is not always the same as fair. Splitting business assets can lead to the overburdening of a business, even the sale of a farm, when other and fairer options may exist. Flexible business structures such as partnerships, contract farming and joint ventures provide options in terms of how to trade and farm. Partnerships offer a flexible trading structure for most family farms, allowing shares and rewards to be changed by agreement between partners. A new partner can be introduced without assets having to be transferred, and can provide a means of involvement for family members not directly concerned with the day-to-day. Involving professional advisors at an early stage will save both time and money. It is the initial discussion that is vital and where that is triggered from is not crucial, however there are key roles for all professional advisors, agents, lawyers and accountants. All will have a valuable input but no singular one has all the answers. While tax should not be the main driver, there are some important tax considerations in succession planning, which also have legal implications. Too many farming families act without consulting advisers only to find that a simple action already taken for practical reasons, such as renting out a house or moving from the main farmhouse, has big tax or legal implications later on. Tenancy succession needs careful consideration as landlords may seek to introduce new terms and in some cases the value of a tenancy can help with retirement planning or restructuring. The first step in succession planning is to examine the current state. By assessing who owns what, what are the main assets and any debt or borrowing arrangements, long term plans can be better formulated. Legal documentation such as wills, partnership and shareholder agreements should be reviewed. Old, out of date or poorly drafted documents can be just as problematic as no will or agreement at all. The next stage should be to find out from all individual parties what it is that they want. Imposing a decision can prove disastrous as no one wants to feel their future has been decided for them and can cause problems further down the line. All parties should be open and honest about what they want and not what they think wants to be heard. My final piece of advice would be that it s never too early to start the process. Grasping the nettle early on will not only result in a better run business, but also less family friction and crucially, the main assets not being lost in a dispute which could be avoided with a simple conversation. 04 youngsrps

5 GRASPING THE NETTLE SUCCESSION IN AGRICULTURE Friday 27th JULY 11am Border Union Show, Kelso at Cookery Demo Theatre Area, next to Food Fair Exhibition Presentation / seminar in conjunction with: Armstrong Watson David Chalmers LLP Bank of Scotland ALL WELCOME youngsrps 05

6 Utility claims do you know what you are entitled to? Written by Michael Halliday Farm Business Consultant I t is just over six months since I joined YoungsRPS and began to work on both land sales and landlord / tenant negotiations. Perhaps one of the most interesting parts of my new role has been dealing with compensation claims against utility companies. Most people know that landowners are required to be compensated if a major infrastructure scheme comes through their land, for example, a gas pipeline or electricity pylons. What is less known, is that anyone who is affected by a utility company project has the right to make a claim. This includes both landowners and occupiers, and can be for anything from a major new project to taking access for a minor repair. Compensation claims can be made up of the following: Easement, Wayleave or Capital payments If a new scheme or works require additional infrastructure, the owner will be entitled to compensation for the reduction in value of their land or wider property. If the utility company proposes work outside of the agreed working area, further additional payment can be negotiated. Loss of income There are a number of ways in which farmers can suffer loss of income as a result of such schemes and hence be offered compensation. Most common claims are for crop loss, loss of grazing, penalties for non-compliance with agri-environment schemes or Basic Payment Scheme (BPS) regulations and damage to machinery or livestock. Reinstatement Works will likely involve extra cultivations to reinstate the land to the condition it was beforehand, including sub soiling, stone picking, re-seeding and extra weed control and these can all be charged for. Additional claims for replacement top soil or severed drains can also be made. Disturbance claims Your time is valuable and any time spent talking to your agent or contractors, moving livestock, spraying, cultivating or harvesting crops as a result of the works can be claimed for. Record keeping is important (e.g. a diary) to justify this type of claim. In focus As with many things, an example or case study is a good way to illustrate a point. The following are compensation claims I ve been involved in: New water supply on tenanted land Scottish Water was putting a new water supply through a field that is farmed by an existing client of YoungsRPS. The farmer knew his landlord was making a wayleave claim against Scottish Water for the new pipe, but was unaware that he himself could make a claim for loss of income; reinstatement and disturbance. On route to visit the farm one day, my colleague noticed the utility works and informed the farmer he could make a claim. The farmers claim included: loss of grazing; cultivating and re-seeding and also a disturbance payment for his time. The claim came to roughly 2,000. Professional fees for advising the farmer and making the claim are paid separately by the utility company and are on a set scale depending on the size of the compensation payment. Wind farm connection to substation A representative of a power company arrived at an owner occupiers farm steading one day saying he had compulsory purchase powers and wanted to purchase a small site to build a connection for a wind farm to the nearby electricity substation (surrounded on three sides by the client s land). An offer of 3,000 was made to purchase the site with a bonus payment to sign up immediately. The farmer sought professional advice and it was soon discovered that the power company did not have the statutory compulsory purchase powers they claimed (it was a private windfarm development). A deal was eventually settled to rent the site to the power company for 25 years at 3,000 per year with upward only rent rises in line with CPI. Payments were also made for disturbance; reinstatement and damage. Involving an agent in any such scheme can save time but also maximise the return to landowner and/or occupiers. Remember utility companies are obliged to cover agent s fees, so your professional fee is covered. It makes sense to seek professional advice. Contact Michael Halliday on youngsrps

7 NEW TO THE MARKET FARM NEAR GLASGOW COMING SOON Annefield Farm Guide price: TBC Former dairy farm extending to approximately hectares ( acres) Three bedroom traditional farmhouse and two bedroom cottage Close proximity to Glasgow and major road links Development potential Available as a whole or in 5 lots Contact Dumfries Office Amisfield, Dumfries Guide as a whole: offers over 3,000,000 Extensive arable and stock rearing farm Extending to approximately 275 hectares (679 acres) 4 bedroom farmhouse and four farm cottages Exceptional range of farm buildings Potential planting ground adjacent to Ae Forest Available as a whole or in 4 lots Contact Dumfries Office SOLD Land near Denholm Hawick Guide price: 60,000 Extending to 2.35 hectares (5.81 acres) or thereabouts 1.78 hectares (4.41 acres) of grassland and 0.55 hectares (1.36 acres) of mixed woodland Suitable for agricultural and equestrian use Good roadside access Contact Northumberland & Borders Office Land at The Bellion Chesters, Hawick Guide price: offers over 450,000 Block of open hill ground Extending to approximately hectares ( acres) Currently used for grazing Good roadside access Planting potential Contact Northumberland & Borders Office To find out more about these properties go to: youngsrps 07

8 News at a glance LFASS to continue into 2019 The Government has confirmed that the Less Favoured Area Support Scheme (LFASS) will continue into It also outlined plans for LFASS in the post-brexit transition consultation, the intention is to continue LFASS, paying at 80% of the current rates. Sporting rates The Scottish Government has issued non-statutory guidance to local authorities on Unoccupied Property Relief for Sporting Rates. This guidance states that 100% relief is available where no commercial shooting or stalking takes place. Alternatively, you can apply for relief under the Small Business Bonus Scheme, which gives 100% relief if your total business rateable value is 15,000 or less, or 25% relief if your rateable value is 15,001-18,000. Voluntary Land Registration The Land Registration etc (Scotland) Act 2012, came into force in December 2014 bringing in a single system of land registry to move away from the old Sasine register. The Scottish Government s aim is that all land will be moved across to the land registry within 10 years. Currently, when land is transferred - for example through a sale or on death - the land will be transferred onto the new system. However you are also able to choose to voluntarily register your land. The benefits are that the new land registry system provides one title sheet and a clearly defined boundary plan, which will make any future transactions or ownership disputes much easier to sort out. At YoungsRPS we can complete land registry compliant plans to go alongside your title sheet. If you would like any more information, please get in touch. EPC regulations New regulations are to be introduced in 2019 that will require any privately rented homes to achieve a minimum Energy Performance Certificate (EPC) rating of Band E when let on a new tenancy after 1 April 2020 and a Band D when let after 1 April All privately rented homes are to have a minimum rating of Band E by 31 March 2022 and Band D by 31 March The understanding is that the proposals will not affect agricultural dwellings let as part of an agricultural unit. They will affect any cottages which are under an agricultural tenancy and sub-let as private rented homes. Amendment to hedge trimming rule The GAEC 7 rule change means farmers who will sow a field with oilseed rape or grass can now trim a hedge or lop branches off a tree before sowing commences, but only during the month of August. This exemption can be extended to fields being sown with other crops during August with prior written permission from the Rural Payments Inspections Division (RPID). Further clarification on the exemption which allows farmers to trim hedges or lop branches off trees for reasons necessary for the purpose of road safety is also available. Show season Our agents will be at the Border Union Show, Kelso on both Friday 27 and Saturday 28 July and the Dumfries Show on Saturday 4 August. Dumfriesshire Northumberland & Borders youngsrps