Succession Stumbling Blocks: Lessons from Thomas v Countryside Solutions Ltd

When it comes to agricultural tenancy succession, numbers are critical – even on a death succession.  I was really interested to see the First Tier Tribunal’s judgment in Thomas v Countryside Solutions Ltd. Handed down on 16 October 2025, the case includes detailed, careful consideration of how mixed income from both qualifying farming and non-farming/non-qualifying sources should be treated and considers the extent to which the livelihood test needs to be met for an application to be treated as eligible, even if it technically isn’t.  Overall a fascinating judgment, well worth a read for those of us advising agricultural landlords and tenants and something of a cautionary tale for farming families who hope to pass on their tenancies under the Agricultural Holdings Act 1986 (AHA 1986).

What does an applicant need to show to succeed to an AHA 1986 tenancy?

To succeed to an AHA 1986 tenancy which carries succession rights, the applicant needs to: 

• be a close relative of the deceased or retiring tenant,
• show that his or her principal or only source of livelihood came from his or her agricultural work on the holding or a wider unit of which the holding was part in at least 5 of the 7 prior years
• demonstrate that he or she is suitable (which we have addressed in more detail in a previous edition of Field Notes). 

What happened in the Thomas case? 

• Mr Thomas’s father held a tenancy dated 6 October 1969 of Trethevan Farm in Cornwall. The applicant’s father died 7 August 2020.  Mr Thomas applied to succeed his late father’s tenancy.
• The applicant and his father ran a mixed arable and beef enterprise. The applicant owned and farmed additional land (“Owner-Occupied Land”) separately from the Holding.
• The landlord accepted that Mr Thomas was a close relative of the deceased and that he was a good farmer, so suitability was not an issue
• The key question was whether the Holding formed part of the same agricultural unit and whether the applicant derived his only or principal source of livelihood from that unit (or from the Holding) for at least 5 out of the 7 years before the applicant’s father’s death.  
• Even though the applicant and his father had made separate basic payment scheme payment claims over the holding and the Owner-Occupied Land, had maintained separate accounts, VAT and SBI numbers and were not in partnership (the respondant landlord had contended that they were – on paper at least - two sole traders) the tribunal determined that the Holding formed part of the wider unit farmed by the applicant.
• The applicant had income from a mixture of qualifying and non-qualifying sources. How that mixture of income should be treated was the subject of expert witness evidence and detailed legal submissions.  

Outcome & significance

The application was refused. The judgment illustrates how mixed businesses (where the potential successor has income from other sources) face significant evidential hurdles in satisfying the livelihood test. The Tribunal preferred a proportional allocation model of mixed funds, which was the respondent’s approach, rather than a “first spend from qualifying income” approach which the applicant contended was appropriate. 

Adopting the proportional allocation approach the applicant had not met the crucial “principal source of livelihood” test. Over the seven years before his father’s death, less than 50% of his income came from agricultural work in six of those years – he only met the test on that analysis in one year. 

On an application for succession on death, even if the livelihood test fails, under section 41 AHA 1986 a Tribunal can still grant succession if the livelihood condition is satisfied to a “material extent”. The applicant argued this alternative route.  
The Tribunal found that the shortfall was too substantial to be treated as satisfied to a material extent (they said the applicant met the test for only one year out of seven), and so the alternative route also failed.  

For rural legal advisers and landowners: the case highlights the need for careful record-keeping of income streams and the separation of qualifying agricultural income from other non-qualifying income.

Why it Matters

For many modern farming families, diversification brings financial stability, but it can also make the AHA succession tests harder to meet. Income from contracting, renewables, or tourism may dilute the proportion of “qualifying” agricultural income, leaving successors short of the 51% threshold even when the family’s day-to-day focus is still the farm.

Lessons from the Case

For tenants and successors:

• Track your income sources carefully. Prove that over 50% of your total livelihood came from agricultural work on the holding (or its wider unit) for at least five of the seven years before succession.
• Keep clear financial records. Diversified income (contracting, tourism, renewables) can reduce the farming proportion: solid evidence is essential.
• Define your agricultural unit early. Be clear on whether the holding forms part of a wider business or stands alone.
• Expect income to be apportioned. Tribunals will split mixed earnings between farming and non-farming work rather than assuming “first spend” comes from farm income.
• Plan succession early. If your agricultural income doesn’t meet the 51% test consistently, consider restructuring or adjusting your business before an application is needed.

For landlords and advisers:

• Scrutinise the evidence. Check that financial records genuinely support the applicant’s livelihood claims.
• Test both the ‘unit’ and ‘livelihood’ limbs. Passing one doesn’t guarantee the other.
• Don’t rely on ‘material extent’. Falling short of 50% - even by a small amount – is seriously risky for an applicant.
• Keep your paperwork in order. Up-to-date records and regular tenancy reviews make future disputes far easier to resolve.

For tenants, the message is simple: keep meticulous records, separate your income streams, and plan early. For landlords, this decision offers reassurance that tribunals will take a strict, evidence-led approach.

In short: diversification is good business, but in tenancy succession, farming must still be the main act.

If you’d like to discuss succession whether planning ahead and considering your strategic approach or for assistance with an application the team at Charles Russell Speechlys would be happy to help.  Please call Maddie Dunn to discuss how we might be able to assist you.  

The case reference for Thomas v Countryside Solutions is ALD/SW/2020/014.