Letting land for horses – a legal minefield!
Whether you like your horse with a plaited mane or horseradish sauce, there is no getting away from the fact that they are complicated beasts when it comes to the law.
One of the traditional contentious issues is whether or not keeping horses can be construed as agriculture. This is not simplified by the fact that agriculture is defined slightly differently in agricultural and planning legislation.
For the purposes of this article, I will examine the considerations that should be borne in mind when letting land for horse grazing. Get it wrong and you could blunder into a bureaucratic cess pit of planning consents, protected tenancies, business rates and potential loss of Inheritance Tax agricultural property relief.
The first thing to determine is whether the horse owner is to have exclusive use of the land. If not, then a Licence Agreement is most appropriate. If they do have exclusive use, then a tenancy will likely be the best bet, but which type? To determine this, you will need to know what the horses are to be used for.
If they are to be used for agricultural business use (working the land or meat production) or just for grazing the land, then a Farm Business Tenancy will be best suited, but do remember to serve prior notice to ensure that the tenancy retains FBT status. If not, a change in business practice (i.e. the original grazing to evolve into a livery business) could mean that the intended FBT becomes a protected tenancy under the Landlord and Tenancy Act 1954.
If the intended use is a non-agricultural business, such as a riding school or stud, then the tenancy should come under the Landlord & Tenant Act 1954, but it is prudent to specifically exclude the protection elements found in Part II of the Act. If it is purely a private undertaking with no business element, then a Common Law tenancy can be used.
Now the tenancy is sorted out, let us consider the planning implications. If the horses are being kept purely for recreation, then a change of use application may well be required, which may not be desirable. A difficulty arises where the land is used for agriculture and recreational horses. There is no clear definition of the proportion of use required to maintain the desired land use status.
Grazing is an agricultural activity in planning law, so land occupied by horses solely for grazing remains classified as agricultural. However, this classification causes the most problems. When does “grazing” become “recreational”? Riding Dobbin round the field, putting up a few show jumps, providing a shelter? It is unclear.
The above should give some food for thought. However, I have not the space to consider other issues such as planning for buildings, Business Rates, Tax and Insurance or Restrictive Covenants. Perhaps I will in a future article.
If you would like any further information or to discuss any rural related matter, please contact Tom Wills, head of the agriculture & estates department at Sintons.