Succession planning and valuations – protect your family and business

Graeme Ferguson

By Graeme Ferguson, Director and Head of Rural & Agency

Establishing a plan for farm or estate succession will ensure effective transfer of assets to the next generation, and a strong succession plan will help protect your business and your family.

Capital taxes can be a significant financial drain on property owners, but many are reluctant to obtain a formal valuation because of the associated expense. This is a short term view – because valuations are key to helping to reduce the exposure of families and businesses to capital taxes.

According to NFU Mutual’s research, only 47% of farmers polled had succession plans in place – and only a third of these had been regularly reviewed to ensure they remained current.

Succession planning – a smooth transition

The first step of any succession plan is a frank and honest conversation to understand the long term goals of the business and the long term plans of those involved.  Do the next generation wish to run the business as it is? Have they a different view of land management? How will the landscape have changed? Will they look to diversify or even cash in their assets? These can often be difficult or challenging conversations, and ones that are often best facilitated by a specialist third party/consultant.

To maximise the benefits for all involved, instructing a property valuation is the next step in the process.

The importance of valuations

Estate and farm property valuations that will inform for succession and tax planning are important – they are equally as important as probate valuations.

It is essential to understand how the assets are owned, who is occupying the land and buildings, and on what basis, alongside the potential implications of both inheritance tax and capital gains tax.

Valuations properly assist tax planners in assessing tax liabilities so they can maximise available tax reliefs and mitigate inheritance tax liabilities for you. For example:

  • Agricultural property relief and business property relief can help reduce or eliminate inheritance tax on farming other qualifying business assets.
  • Capital gains tax relief can be claimed on qualifying agricultural and business assets and gifts into certain types of trust.

Values can be used in succession planning in the apportionment (distribution) of the estate or farm and planning for probate purposes. In some circumstances the property may not have been valued for many years or indeed decades.

Valuing your land

With offices across Scotland and Northern England, the team at Davidson & Robertson has the expertise, and the long standing practical experience, to provide the rural sector property sector with expert advice on valuations – be they formal RICS valuations for capital taxation, land sale or purchase, succession planning, secured lending or other matters including landlord/tenant issues.

For more information or an informal chat about succession planning or valuations for your property, contact Graeme Ferguson, on 07854 899 323 or email 


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