For Those Involved in Agriculture: Mid-term Review Entitlement and your Will - Summer 2004

01 July 2004

There can be few in or connected with the agriculture industry who do not know – to a greater or lesser extent – of the Single Income Payment Entitlement arising out of the Mid-Term Review. Arable Area Payments, headage and other support payments currently based on production will be replaced by the de-coupled SIPE which will be payable to the farmer and which will be able to be sold by him independently of land. (Leasing of SIPE will need a related lease of land).

The purpose of this article is not to explain SIPE (still not yet fully evolved) but to make a crucially important point to those farmers who have or will have a SIPE.

Just as the SIPE is to be de-coupled from land for purposes of payment and administration, so it is likely to be de-coupled for the purposes of transmission on the death of the farmer. If, in his Will, a farmer makes a specific gift of his farm (say to his farming son) and leaves the residue of his estate elsewhere (say to his non-farming daughter) the de-coupled SIPE will probably pass with the residue to the daughter unless the Will specifically deals with the SIPE and ensures that it passes with the farm.

This probably unexpected result of the EC regulations could have unhappy results in farming families if action is not now taken to correct existing Wills or put new Wills in place. If you are likely to be affected by this situation contact Christopher Wacher or the lawyer here who last dealt with your Will.

Although SIPE will not be fully introduced until early in 2005 you should act now because the right to a SIPE probably arises from 29 September 2003. Thus, although you will not yet have a SIPE itself, your right to one may already exist. That right is something potentially covered by your Will. It is likely to be transferred in accordance with the residue provisions unless you make a new Will or Codicil directing otherwise.

Until evolution of the SIPE scheme is fully complete one will not know for sure how every detail is to be dealt with. That general principle applies to the specific subject matter of this article. Having said that, the risk outlined in the preceding paragraphs is sufficient to justify all affected farmers taking steps to remove any uncertainty by making specific provision for their own Entitlement by Will or Codicil.

This advice applies to (a) farmers who have a historic entitlement through having made support claims in the base years 2000 to 2003 and (b) farmers who are farming and register their land for the regional entitlement in March 2005.

Of course if you don’t have a Will at all your property (including any SIPE) will be passed on in accordance with statutory intestacy rules. No differentiation is made between various sorts of property.

If you have a Will but have married or divorced since making it, your Will may be in part or whole invalid. If you have married then (unless your Will was made in contemplation of that marriage and it states so) your Will will be entirely revoked and you will be treated as dying intestate. If divorced your previous spouse will (if mentioned in the Will) be treated as having died before you – but otherwise your Will will continue to have effect.

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