Angela Moores
Formerly of Jarvis Family Law, Harrogate
Family & Divorce Solicitors Harrogate,Oldham,Ashton under Lyne,Stockport Menu

What About The Farm?

On any divorce it can sometimes be difficult to divide the assets available, but when the main asset is a farm this can become even more complex if the correct legal advice is not available.

The key to resolving cases which involve a working farm is to divorce law for farmersmake sure that all the assets and income are understood, correctly identified and valued. It is also important to understand the history of the farm and how it works on a day to day basis. Often the farm supports more than one family and financial arrangements can be complicated.

When I am considering a farming case the start point is to identify the assets and income;

  1. What live and dead stock do we have and arrange for this to be listed in an agreed document. It is then clear what a specialist valuer is to value although with the constant sale and purchase of animals/crops/stock this can sometimes prove to be a “moving target”.

  2. What properties are owned and are there any tenancies or any agricultural ties affecting those properties. How might these affect the value of the properties? Who might be entitled to live in those properties?

  3. Is there any other land which is farmed/rented and if so who owns that land? Often land is owned by one partner but farmed by the partnership without payment of formal rent.

  4. What if any subsidies are available and do they have any value? For example the single farm payment is currently undergoing some change and it is important to have an awareness of those up to date farming issues.

  5. What are the terms of any partnership agreement and what capital and current accounts do they show for each of the partners? Sometimes the reality of what happens is not represented fully in the accounts.

  6. How is the income from the farm dealt with – are profits left in the partnership leading to marital investment of monies which would have otherwise been available within the marriage.

  7. What borrowings/leases/overdrafts does the partnership have and how are they serviced and on what terms? Farmers usually have a close working relationship with their bankers.

Once we have the assets clearly identified we can value them and then have the farming business as a whole valued. Tax considerations are often different for agricultural land but have to be considered to achieve a net value. Liquidity is then considered as to whether land could be sold to meet the financial claims arising on divorce or whether the bank will lend further monies if cash is not readily available.

Whilst the start point for division of assets on divorce in most cases is one of equality, farming cases - where the farm has been in one spouse’s family for generations – usually provide an exception to that approach. That important contribution however has to be balanced against the need of the other spouse to be housed particularly if children are involved.

These are just a few of the issues a solicitor needs to consider on any farming case on divorce. Without these issues being fully considered, it is inevitable that one or other spouse is likely to have the wrong outcome on his/her financial claims on divorce.

Back to In The Press