Succession planning
Welcome
Next gen farmers
In their own words
NEXT GEN FARMERS
Savills 2025
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Copyright © 2025 — Savills
Farmers and landowners can be forgiven for feeling their world has been turned upside down during the past six months.
Despite the UK having left the Common Agricultural Policy (CAP) in January 2021, the settled policies for each of the three nation states have yet to be delivered. And while we might have some sense of the general direction those policies could take, the important details remain absent. More recently, reforms to both Agricultural Property Relief (APR) and Business Property Relief (BPR) have further shaken the sector’s confidence, and the sudden closure in March of England’s Sustainable Farming Incentive (SFI) will have left many in the sector feeling stunned. Under the CAP, which was the same for all three nation states, warnings of such significant changes to agricultural policy would be broadcast well in advance. Yet, in the past few years, we have seen substantial policy swings with little or no warning. The full impact of this is yet to be seen, but it’s clear the agricultural sector now needs to adapt and flex to an ever-changing policy landscape. However, if we stand back from the short-term turmoil, and we consider food security, climate change and water, agricultural land has never been more important or relevant to the wider society.
As such, I believe it continues to represent an exceptionally good long-term investment opportunity, and I have no doubt the challenges faced today are raising public awareness of the meaningful contribution the rural sector makes to us all. Farmers are hugely resourceful and resilient and will adapt to the new policy frameworks; and the ideas and enthusiasm of the next-generation farmers we meet in this issue are testament to that. But I do think people need to operate against today’s backdrop, and make decisions on that basis, as we discuss in our article on succession planning. Increasingly, there is no one solution that fits all, and each farm or rural business needs to sit down with its professional advisors and come up with a solution that meets their needs. Explore all the opportunities available to you – whether that is natural capital or regenerative farming or mineral extraction – and always think outside the box.
JONATHAN HENSON
Head of UK Rural
07967 555 550
jhenson@savills.com
Spring / Summer 2025
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Savills 2024
Copyright © 2023 — Savills
Next Gen farmers
Succession PLanning
A Generation Game
In an environment of financial pressure and a changing tax landscape, new and younger farmers are looking to farm in different ways, bringing a youthful energy with them.
Loddington Farm in Kent has been in James Smith’s family since 1882. Once a commercial apple and pear farm supplying major UK supermarkets, it has now pivoted to work with nature and produce environmentally friendly food, with an award-winning farm shop and Owlet Fruit Juice - pressed and bottled on-site.
“Before, we always seemed to be stuck in the cropping cycle and never able to make money,” explains James, who consults with Stuart Nicholls, Savills Food and Farming.
“As a consumer-facing business, we now have a brand and a far wider market reach. We’ve also diversified away from the somewhat monocultural approach by re-introducing livestock, such as chickens, to supply eggs to the farm shop. It’s dynamic, diverse and we have an awful lot going on, but I see huge potential in the future.” Changes such as these have been mirrored across farms in England over the past few decades, but now they are no longer supported in the same way by EU subsidies. With direct payments to farmers ending in England, and being curtailed to different degrees in Wales and Scotland, the pressure is on to find other sources of income, says Tom Cackett, Savills Food and Farming. “That’s where the energy of the next generation comes into play.”
It’s dynamic, diverse and we have an awful lot going on, but I see huge potential in the future.
James smith
New initiatives
One of the initiatives embraced by several next-generation-run farms, such as Loddington, is a movement towards growing directly for companies and cutting out the middlemen. Tom cites Wildfarmed, the regenerative farming and food business co-founded with Andy Cato, a DJ and co-founder of the rap-rock duo Groove Armada. In May 2024, he launched an exclusive range of bread and flour products grown exclusively for Waitrose. Isobel Connell is 34 and a fifth-generation farmer in Buckinghamshire, farming in partnership with her husband. Like many, the farm has diversified heavily in the last 15 years, the most significant of which has been opening a campsite on the farm called Chiltern Retreat.
“It started in 2012 and grew rapidly after Covid-19,” explains Isobel. With the help of Tom at Savills, she was awarded a Bucks Rural Business Grant to aid the funding of a new cricket pavilion to support local sports teams while also hosting events, weddings and forming part of the campsite business. However, plans are currently on hold. “When the Budget came out, we decided to reconsider. We want to keep investing and progressing but the risk of increasing capital value for fear of losing it to tax is a real concern. We’re considering all options to ensure we can adapt to any future changes, while investment is key, I firmly believe so is bringing the next generation into the business,” she adds.
Passing on the reins
“One of the unintended consequences of recent changes to inheritance tax and the tightening of finances is that some farming businesses are proactively looking at passing the reins to the next generation,” says Tom. “My gut feeling is that in the past, because there was no incentive to pass farms down earlier, by the time the next generation got the keys, enthusiasm to introduce new ways had waned. Now, there’s a recognition that things need to be done differently. And that involves bringing in the young with energy.”
This is something that the Shropshire-based regenerative farmer Clare Hill has noticed. “Before, it was assumed that the most tax-efficient approach was to hand the farm down at the latest possible date, now this is happening much earlier.”
“People see there is a need to do something differently: soil health is in decline, farms are losing subsidies, chemicals are going up in price. There are always challenges in agriculture, but the world is forcing us to become more entrepreneurial. As with everything, there’s always an opportunity. Yes, it’s hard and scary at times, but the one great thing is that farmers get to design a system that suits them.”
The spirit of this is also behind new initiatives. including Pitch Up. This Dragons’ Den-style competition, run by the Kingsclere Estate, invites those with great farming ideas – but without the land to put them into practice – to pitch them to landowners.
COMING TOGETHER
Isobel Connell and her husband
Clare Hill
Opportunities in Scotland
North of the border, there are different incentives and pressures, explains Alice Jackson, Savills Food and Farming consultant. “For a young person going into farming, it’s not easy to find a tenancy today. For tax reasons, landowners are looking to bring farming back in hand and offer a five-year contract farming agreement instead. As a result, there are larger farms and fewer opportunities for the younger generation to get into farming in the first place. In 2022-23, 59% of farms had at least one diversified activity. That these activities aren’t more widespread is possibly down to the fact Scottish farmers continue to receive basic payments – although, from this year, they have to deliver new things in return, such as carbon audits and soil analysis. “Although the government hasn’t said what will happen in the future, it looks like direct payments will continue in some form and support farming sustainably,” says Alice.
Figures show attitudes towards diversification in Scotland are changing. Research by NFU Mutual published late last year revealed that those planning to start diversifying in the next five years have risen to 17%, up from only 3% in 2023. “From what I see, the fact that we think direct payments are continuing until about 2028 means there are different approaches from younger farmers,” says Alice. “Some want to overhaul how things are done and bring in new income streams in parallel with long-standing farming activities, while others are continuing as before.”
Another trend emerging across the board, but particularly between next-generation farmers, is a more collaborative approach: sharing resources to reduce expenses. Clare cites a scenario local to her in Shropshire where poultry sheds are now moved around three different farms. “We’re seeing more farmers entering joint ventures than ever before,” agrees Tom.
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Back at Loddington in Kent, James looks to the future. While his sons are only nine and seven, some nephews are already old enough to help out at weekends. “My challenge is to create something that feels like an exciting opportunity rather than a struggling legacy. That’s why I’m ploughing the energy in now – even though the fruits will most likely be enjoyed by a later generation.”
Aspects of land
succession planning
Taxing times
On 5 April 2026, 100% of tax relief on qualifying property will come to an end and be restricted to the first £1 million of combined agricultural and business property. After that, a 50% relief from inheritance tax will apply to a deceased individual’s estate, meaning an effective inheritance tax rate of 20%. The tax allowance will not be transferable between spouses, and the same terms will apply to a trust. Importantly, this impacts more than just owner-occupied farms; it now includes the tenanted sector and many other family businesses, from garden centres to hauliers. “Traditionally, tax planning for farmers has been relatively simple, but the advice to actively farm and hold until death has now totally changed,” says Sarah Jackson, Savills Rural Consultancy. “The announcement of these tax changes has generated genuine fear among farmers,” comments Andrew Wraith, Savills Food and Farming. “Farmers are already dealing with a lot of changes that are likely to increase production costs. The risk of having to deal with an unexpected tax bill impacts how decisions are made and can significantly affect the potential profitability of a business.”
In our January Spotlight report, our modelling shows arable farms with a single owner would become subject to inheritance tax at around 150 acres, while the tax affects upland livestock farms of roughly 300 acres and above. These would both be considered small family farms. The tax liability must be paid over the 10 years post-death, and funding it from business profits will be challenging. Defra’s figures show a farmer’s average return on capital employed in 2022/23 was 0.5%, and the 10-year average is -0.09%, meaning the median farm is effectively operating at break-even, and therefore has no profit to pay the tax. The 10-year average for arable farms is better at 1%. Even so, our modelling suggests that for an arable farm of 400 acres, the tax liability would exceed £560,000 and equates to over 150% of the business’s profit for those 10 years, after income tax of 20%. For an arable farm of 1,600 acres, the tax liability is likely to represent over 220% of the profit over the 10 years post-death.
the farm size likely to trigger an inheritance tax liability
FARMING IN NUMBERS
124 acres
the number of farms over 124 acres in size
72,000
the number of UK farm holdings
217,000
the country’s agricultural land occupied by farms over 124 acres in size
88%
the potential tax liability on succession for a 200-acre arable farm
£157,000
Much has changed in the UK since 2024’s Autumn Budget. Despite intensive lobbying by the National Farmers Union (NFU) and the Country Land & Business Association (CLA), the government’s decision to cap tax relief on farms and agricultural land remains resolute.
Both Sarah and Andrew believe farmers need to act now. “We recommend establishing exactly what is owned across the business and by whom,” says Sarah. “Landowners need to identify between ‘core assets’ and ‘non-core assets’, because disposing of non-core assets can help to reduce your tax liability,” adds Andrew. “For example, is there an area of land or a property that wouldn’t affect the health of your business if you no longer had it? Are there assets that carry a large amount of capital gains tax that are not trading or don’t qualify for any relief? Can you initiate an early transfer of property to other family members?” The existing 100% tax relief will still apply to “conditional exemption”, including heritage buildings and quality landscapes, but this has very limited application and is unlikely to help most people.
Sarah also believes it’s important to consider what the business might look like in 10 years. “Who is going to take over the farm, and when? What property will you live in, and how much income do you need for retirement?“ “We hope these tax changes will encourage transparency and enable more open conversations within farming families,” she says. “However, any decision has to be right for you, your family and the people who are inheriting the business – not just to save money.” More than anything, Sarah and Andrew urge farmers and landowners to seek professional advice. “These are really complex tax changes to navigate by yourself,” says Sarah. “Professional fees are worth the investment now to help you preserve your business for the future. Ultimately, these reforms hurt the people the original reliefs were designed to protect. We can only hope that further reform is on its way.”
PLANNING AHEAD
At a glance
Tax news on trusts
Trusts are also impacted by the proposed changes to inheritance tax. From 6 April 2026, there will be a combined £1 million allowance per trust on the value of qualifying property – to which 100% relief applies on each 10-year anniversary charge and exit charge. If a settlor established multiple trusts after 30 October 2024, the £1 million allowance will be shared between them.
The government ran an open consultation between 27 February 2025 and 23 April 2025 but, as Sarah Jackson notes, “We haven’t seen any of the draft legislation yet, but there appear to be a number of pitfalls such as the relief being applied chronologically.”
The fact remains that existing trusts could fall into this regime quite quickly, depending on where their 10-year charge is. “We still believe there are opportunities for trusts within succession planning, but farmers and estate owners should be considering trusts for reasons other than simply reducing tax liabilities,” says Sarah.
It’s important to consider what the business might look like in 10 years.
2025
Spring / Summer
In their own Words
rural roles
career opportunities
Claire Banks
07816 355 315
claire.banks@savills.com
Forestry Consultant
I pivoted into forestry after ten years in the upstream oil and gas industry. After graduating with a degree in geology, I worked for a geological consultancy looking at petroleum exploration sites across the world.
Increasingly feeling that the work wasn’t aligned with my personal values, I realised it was time to look for a more environmentally-focused position, something that was good for nature. I began an MSc in forest protection with conservation at Harper Adams University. While studying, I applied for the Savills graduate programme and, once the course was complete, I started as a graduate forester in September 2022 based in Petworth, West Sussex. During the next two years, I shadowed colleagues in the various areas of the forestry business. A personal focus is to obtain chartership with the Institute of Chartered Foresters – and a great aspect of the Savills forestry graduate programme is that it is accredited with the institute and provides two qualifying points towards that goal.
On completing the graduate programme, I became a full member of the Forestry team. No two weeks are the same. My primary role is in woodland management and consultation and my clients range from private estates across the South East to The Crown Estate and the Church Commissioners. At the same time, I work on grant applications or use my prior experience with GIS to manage and analyse spatial data on specific areas of woodland. The sector is changing, but it’s still unusual to be a female forester and I’m proud to be working in a career that is making a positive contribution to the environment.
Rosie Harrison
Associate Rural Surveyor
07860 752 696
rosie.harrision@savills.com
While I had spent a lot of my childhood in the pool, my other passion was being outside, with the horse I shared with my sister. I knew I wouldn’t be happy choosing a profession that kept me at a desk all day.
I grew up in a rural village outside Stirling and took up competitive swimming as a child. When it became clear, however, that it wouldn’t be a professional career, I turned my attention to the land. Having studied environmental geography at the University of Stirling, I went on to complete a masters in land economy at the University of Aberdeen. With that under my belt, I applied for a graduate surveyor position with Savills in the Perth office as part of their estate management team. Just before I sat my APC, I joined the Scottish Consultancy team where, after a year carrying out valuations, I was seconded, as part of the role, to work at Buccleuch on the Queensberry Estate.
The secondment was originally supposed to be for three months, however I stayed for four years – gaining valuable experience in estate management across their wide-ranging portfolio, including agriculture, forestry, property, hospitality and sport. Next, I joined the team in Carlisle to focus on a variety of roles – from managing two very different estates (one institutional, one private) to carrying out valuations. In January this year, I moved to the Dumfries office as part of the Scottish Rural Consultancy team to help grow this type of work.
Richard Binning
UK Board Director and Head of Oxford office
07968 550 312
rbinning@savills.com
I always advise young people I meet to do work experience in their field of interest; it could prove invaluable, even if, like me, it ends up striking something off the list.
As a young boy, my dream was to become a vet. However, after a week’s work experience in my early teens, I quickly realised it wasn’t going to be for me. Instead, I undertook a degree in land management – during which I did my sandwich placement year with the Savills team in Salisbury. I was very lucky: even though I was, appropriately, very low down on the pecking order, I enjoyed the work and people, the office was extremely lively and I knew immediately that it was the right career. After graduating in 2001 and a spell working on farms overseas, I joined the Savills graduate scheme as part of Land Management based in Wimborne.
After qualifying, I moved back to my home city of Oxford to specialise in selling land, farms and estates in Oxfordshire and the surrounding counties. Alongside heading up the Oxford office, it remains one of my core areas of interest today, particularly in the early stages of adding value and planning. Over the years, I’ve acted for different types of landowner including private, corporate and institutional with properties ranging from strategic land parcels to large country estates – and lots in between. In January 2025, I was appointed a Savills (UK) Board Director and asked to run the Finance & Operations Board within Savills Rural. As our strategy is to seek growth, it’s an exciting area to be in as we look at new services and geographies to embrace.
The scope of career opportunities in Savills Rural is wide and varied. Here, three people in the business share their stories.
