Landed Estates: The Whole Estate Plan
Landed estates and farms are used to their business success, or otherwise, being subject to the whims of weather and climate. These businesses have had to become resilient to unforeseen challenges through frequent exposure. That notwithstanding, the last 18 months (if not longer) seem to have packed a disproportionate level of challenge into them before we even consider COVID-19. However, the ongoing pandemic can provide businesses and those who advise businesses with an opportunity to take stock of themselves in a way that they may not have been able to in a “normal” year. In doing so, they have the chance to identify and capitalise on the potential opportunities presented by a change in working patterns and lifestyles, stemming from the current pandemic.
An important part of such stock-taking includes revisiting existing business and succession plans and considering a number of things – whether they are fit for purpose; whether they identify the business’ core aims; whether they require review in light of changes to the UK tax regime; whether there are opportunities that are being missed, or not being exploited to their full potential; or whether there are areas that are no longer (or perhaps never were) viable. This analysis applies to landed estates as much as to any other business seeking to emerge from the pandemic in good shape.
Having a plan
All businesses should have a plan to set out how they are going to be a success, and landed estates are no different in that respect. However, what does differentiate landed estates from other businesses is that they are so much more: they are homes, they are the centre of a community and they are a legacy to be safeguarded for future generations. As such, having a good estate plan is essential to ensure that all these facets of an estate are protected and their requirements met.
Purpose of the plan
Knowing that you need a plan (or need to review the existing plan) is important; but before launching into this, it is just as important to consider what purpose it serves. From our experience, having a whole estate plan delivers a number of ends:
- Goals - It establishes clear goals over the short, medium and long term that the estate wishes to achieve together with the roadmap for meeting those goals. Part of this includes clarifying where the succession to the estate will pass so all are aware of this, ie both family and advisers.
- Constitution - It serves as a constitution or a charter which binds together the various entities that own and manage the estate and those that are employed by the estate; it establishes a common purpose and something tangible into which people can buy.
- Benchmarking - With so many entities and characters involved in an estate, having a clearly defined set of objectives provides accountability for those charged with managing the estate’s interests. It sets a benchmark against which performances can be judged.
Every landed estate has its own characteristics and must be considered on its own merits; there is no “one size fits all” solution. However one characteristic that is common to many landed estates is the core objective to ensure that the estate will continue to thrive for future generations. A large part of achieving this goal is to ensure that the estate operates as a financially viable business. How an estate goes about achieving this will depend very much on the individual circumstances of the estate. However, another area of shared ground between many estates is that their capital assets give them the potential to become multi-faceted businesses with diverse streams of income; this is an area in which Charles Russell Speechlys can offer significant help and expertise.
There would be little point in trying to set out a comprehensive list of options available to estates to consider as part of their planning as any such options will be dictated by the traits of each estate. However, it may be helpful to set out the areas in which we have helped our landed estate clients in the past:
Farming – we cannot escape the fact that Brexit, the impending Agriculture Act and a greater focus on food security and climate change will all force change on the way in which we farm and produce food in the UK. As with all change, this can also create opportunities to restructure existing practices and indeed seek greater collaboration across the agriculture industry.
Forestry – there has been much made of the opportunities around investing in forestry. Recent market data suggests that the value of forestry traded each year is worth around only £150 million. It is, therefore, a small investment arena, but one that is set to grow as investors become increasingly aware of its qualities.
Regeneration – with the change in working patterns, and a likely increase in numbers of people working from home and perhaps looking to live in the countryside as a result, there is real opportunity for redevelopment of disused buildings, housing stock and business spaces, to encourage local businesses and regenerate rural communities. This in turn can create a requirement for reliable services, such as internet and mobile phone coverage, and an increased demand for heating and electricity with the challenge of limiting the impact on climate change. Solutions to these problems can be found in estate-led infrastructure projects.
Tourism and leisure – with more people enjoying holidays in the UK, holiday lets and visitor attractions should rise in popularity. There is also a growing trend in “buying local”, which extends to luxury goods, including UK wine.
Strategic development – a growing rural society will spur on the need for wider development beyond the local community, such as motorway services and new towns. This requires specialist arrangements and one any landowner must plan for.
Ownership structure – tax planning will underpin any changes that an estate wishes to put into effect. As such, it is important to ensure that the ownership and trading vehicles are suitable for achieving the long-term aims of the estate. Part of the succession planning process allows for succession plans to be stress-tested against the current UK tax regime. Taking advantage of changes in tax legislation where possible can serve a purpose, but must not be to the detriment of the main objective.
Branding – for those brands that warrant it, in a more consumer driven world, it might be worth marketing the Estate as a product. This could assist with marketing local produce and visitor attractions, as well as the ability to franchise more easily, including abroad.
How we work
We do not work as a silo and we do not think in silos. We like to consider everything in the round to ensure that all parts of the estate are working towards the same end. No single aspect of the estate is viewed as a separate concern; it is just one part of the much larger whole.
Similarly, we view ourselves as part of the solution rather than an all-curing tonic. We treasure our connections with other professionals and enjoy collaborating with agents, accountants and planners, to name a few examples, to help our clients achieve their aims.
How we can help
Charles Russell Speechlys has provided advice to landed estate owners for well over a century, providing us with decades of experience in the “traditional” aspect of landed estate management; we understand landed estates.
In addition to the traditional areas of advice that are associated with landed estates, as a full service firm we have specialities and expertise in niche areas that makes us ideally placed to help review and consider the merits and possibilities of potential new ventures and opportunities on an estate.
This article was written by Tristram van Lawick.
IBA Annual Conference
The IBA heads to Miami for its 2022 Annual Conference bringing together thousands hundreds of lawyers from around the world.
Mind your business: Safeguarding your business against loss of mental capacity
Practical considerations to safeguard your business against loss of mental capacity.
Jack Carter writes for eprivateclient on the registration requirements for trust structures holding UK real estate
Trust structures holding UK real estate: Reporting requirements under the Register of Overseas Entities
FT Wealth quotes Sarah Anticoni on forum shopping
"Being the first to file for divorce is not a foolproof way of securing an English hearing"
A guide to protecting non-matrimonial assets in divorce
Learn what you need to know about non-marital assets and how to protect them in a divorce.
Alexia Egger Castillo
Wealth Structuring Developments In Switzerland
Careful considerations need to be given when setting up wealth and estate structures and vesting funds in them.
New Legislation on Reciprocal Recognition and Enforcement of Judgements in Matrimonial and Family cases by the Courts Hong Kong and the Mainland
The implementation of the Ordinance offers better safeguards to the interests of parties to cross-border marriages.
EG quotes Emma Preece on the Picturehouse and BNY Mellon rent arrears cases
“The case is being closely watched by landlords and tenants alike as the impact of the pandemic lives on in the commercial property sector”
Pro bono support for major office premises move for charity in Stoke-on-Trent
Emmaus entities provide safe homes, community support and meaningful work to formerly homeless people across the UK.
Ghassan El Daye
The Business Breakfast interviews Ghassan El Daye on the legal procedures surrounding international extradition
Financier Worldwide quotes Rachel Warren on the UK’s Economic Crime Act
Evaluating the UK’s Economic Crime Act
Julia Cox and Felicity Chapman write for International Adviser on the rise of pre-nups in the UK
Julia Cox and Felicity Chapman write for International Adviser on the rise of pre-nups
Property Patter: Reasonable Endeavours
What does it mean to use ‘best’, ‘all’ or ‘reasonable’ endeavours?
New Swiss succession law on the transfer of businesses
On 10 June 2022, the Federal Council adopted its Message amending the Civil Code on the transfer of businesses by succession.
Joshua Green writes for Spear's Magazine on Wagatha Christie’s lessons for HNWs
Wagatha Christie’s lessons for HNWs
Hannah Turner writes for the EG Legal Q&A on the validity of a section 21 notice
Q&A: Tackling technicalities and typos
Lessons from Davos: Private Capital and ESG
The scale of the investment needed to achieve global climate and social goals is far beyond what public funds can afford.
Citywealth publish a '60 second' interview with Julia Cox
Leaders List interview: 60 seconds with Julia Cox
Register of Overseas Entities
Read more about the registration requirements for trust structures holding UK real estate and reporting requirements under the TRS and ROE
What happens if one party passes away during a divorce proceeding: Part II
What does all this mean for divorcing spouses?