Small landholdings in Scotland: legislation review

Succession

Issues Raised

51. Although there is a right of succession for small landholders, some perceive that the succession provisions in the legislation are inadequate for a modern tenancy. There were suggestions that the categories of eligible successors required to be widened to provide the small landholder with more opportunities to identify an eligible successor, similar to the approach taken for agricultural holdings.

52. The majority of small landholders who responded wanted to ensure that they could pass their small landholding to their successors, regardless of how the future policy developed or altered.

53. Some small landholders considered that there was little demand from new entrants for opportunities to succeed or be assigned (see below for discussion on assignation) a small landholding as it was not seen as an attractive option. One reason why it may not be an attractive option, is that it may prove difficult for some to provide a full time occupation on the small landholding due to its size ^[44] and there may also be associated maintenance costs arising from managing a small landholding. ^[45]

54. Landlords and small landholders both raised concerns that where small landholdings had deteriorated, the successor would be required to invest to make the holdings fit for agricultural production.

Legislation

55. The 1886 Act allows for the bequest of a holding by a landholder to certain persons. The provisions of the 1886 Act on bequests were amended to take into account the Succession (Scotland) Act 1964. The general position is that a small landholder may, by will or other testamentary writing, bequeath their right to the holding to certain persons. ^[46] The list of persons to who they may bequeath the holding are their son-in-law or any one of the persons who would be entitled to succeed to the estate on intestacy. ^[47] The person to whom the holding is bequeathed is known as the legatee, and the 1886 Act sets out the process which the legatee is to follow to succeed to the holding and become the small landholder of that holding. ^[48]

56. Where a small landholding is not the subject of a bequest contained in a will or other testamentary writing, or any bequest is declared null and void, or the legatee does not accept the bequest, the holding forms part of the deceased's intestate estate. Rules on intestacy contained in the Succession (Scotland) Act 1964 apply to any such lease. The 1964 Act sets out a process ^[49] by which an executor can transfer the interest in an agricultural lease ^[50] to a person known as the transferee.

Discussion

57. Any guide to the current small landholdings legislation that is prepared could include information on how the provisions of the Succession (Scotland) Act 1964 apply to small landholders, as well as an outline of the succession provisions of the legislation on small landholdings. This information could also be included as part of the Farm Advisory Service provision to small farms, thereby supporting stronger businesses. These proposals could assist small landholders (and statutory small tenants) in undertaking in-life planning. Small landholders are also encouraged to seek independent legal advice specific to their own circumstances.