Since 1 January 2005 payments from the EC to farmers are now linked to the occupation of land. Farmers are awarded a single right to a payment per hectare each known as a entitlement in return for managing the land, not for producing agricultural crops. A farmer has to be carrying on an agricultural activity and can be an individual or a company or a partnership. Similarly farmers operating under such farming agreements who carry out the agricultural activities are likely to be those entitled rather than the farmer who provides the land. Entitlements are freely transferable and must be notified to the Rural Payments Agency. Both the seller and buyer have to be a farmer under the definition. Entitlements can be transferred without land subject to certain conditions and VAT is chargeable in that instance. Stamp Duty Land Tax is not payable as an entitlement is not an interest in land.

For advice on Entitlements and Single Farm Payment matters please contact:

Glyn Evans on 01934 637911 e-mail evans@powellslaw.com or
Stephen Soper on 01934 637915 e-mail soper@powellslaw.com.

See also our Agricultural fact sheet (PDF).