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Meeting the challenges of running rural businesses

27 Jul 2020

Owners of agricultural and rural firms get to experience all the challenges and complications of running a business, but with the extra dimension of doing so in the countryside environment that has its own unique character.

Due to the nature of long-term family ownership structures, property and succession planning issues, the rural economy can be (or become) rather intricate and difficult, while the rulebooks around issues such as subsidy payments and capital allowances can often entail complexities galore.

It’s a sector in which we’ve accrued considerable experience, experience which has developed out of the work that our private capital team has carried out over the years on behalf of individuals and families with farming and rural interests.  Our commercial property and corporate teams have also, in recent years, become established and trusted advisers in this sector.

We’ve developed good relationships with all the leading rural advisory firms across the region and take a collaborative approach which brings benefits for everyone involved.

One project we’ve completed recently, alongside the team at the Alnwick office of George F White, was the acquisition of a north Northumberland agriculture business and 50 hectares of arable land by a longstanding local farming firm which was looking to expand its operations.

R Brewis & Partners has been operating in the Belford area since the 1950s and currently runs a mixed livestock and arable operation on around 650 hectares of local farmland.

Earlier this year, the family-owned firm purchased the entire issued share capital of Fordell Farms Ltd, which includes the 50 hectares of land to the west of Belford, for a seven-figure sum and is now in the process of integrating it into its existing operations.

This transaction was time-pressured and involved factors specific to agricultural businesses, such as

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consideration of the Basic Payment Scheme entitlements that were part of Fordell Farms’ operations, but it progressed smoothly thanks to the expertise of my colleagues Ben Jackson and Chris Anderson, who looked after corporate and commercial property aspects of the deal respectively.

Generally speaking, the rural and agricultural sectors seem to have weathered the storms of the last few months quite well, with the substantial increase in domestic demand for food and produce supplies this year helping to create positive trading conditions.

The uncertainty relating to the end of the UK’s transition period after leaving the EU in January is probably the darkest cloud on the horizon.

Even if we can’t yet be entirely certain what’s going to happen, rural business owners ought to be giving consideration now to the different ways in which this seemingly-immovable line in the sand could or will impact on their operations.

To discuss any aspects of rural or agricultural business management, please contact Alison Hall on 0191 232 8345 or at alison.hall@.hay-kilner.co.uk