Case Study Q's Flashcards
You considered an MLDT was the most appropriate lease in which to potentially lease the farm. Can you give me an overview of this lease type?
MLDT - Modern Limited Duration Tenancy, introduced by the Land Reform Act 2016.
Minimum term of 10 years.
You said that renting would impact on tax reliefs at a later date. How so?
APR & BPR
How would renting the farm impact on the farmers tax reliefs at todays date?
Sold for £1,030,00. BPR and APR maximum £1m.
You provided advice to your client on a Contract Farming Agreement (CFA) being an option.
a. Can you talk me through the basic model of a CFA for a livestock business?
b. How would this model have worked specifically for a dairying business?
c. What were the tax implications of your client taking this option?
You advised your client to put the farm on the open market instead of undergoing a private marketing campaign which they agreed to
a. Outline why you felt this was the better option?
b. Did you consider the neighbouring businesses to your client a marketing privately with them? Would they have paid a premium to buy off market? You acknowledge that there was a marriage value to be obtained.
What was the discrepancy with the footpath that you uncovered as part of a due diligence?
You state that the valuation advice your provided did not meet the criteria for the RICS Reb Book. In what instances would you need to provide Red Book valuations?
- You advised your client to apply a clawback agreement on the land adjacent to Galston for any future development.
a. Did you look at the prospect of your client retaining the land and putting it forward for development under the LDP?
b. Was there any provision of the site should it be commercially developed? You mention that the claw back is for residential development only.
c. What made you advise 25% as an uplift in values?
d. How is the 25% calculated? Value of the land sold now to value of land sold with development = 25% of the difference.
You had a delay in the property going under offer in June and the missives concluding in November – a total of 5 months. Why was there such a delay when your purchaser was willing to be flexible with the entry date?
How did you protect your client’s interests in this circumstance?
Financial penalty to the purchaser if they pull of the deal, get missives signed asap.
b. You say the farm sold for £1,030,000 but the highest bidder was at £1,250,00. What accounted for the uplift?
How do milk contracts impact the sale of a dairy farm?
How did the farm’s agricultural use influence potential buyers?
How did you handle discussions around the milk contract and the buyer’s ability to secure one?
How did you justify the valuation of Barward Farm when advising the client?
Can you explain how the sale price compared to your initial valuation and what influenced any differences?
What impact do residential development clawback agreements have on valuation?
If the farm had been subject to a tenancy, how would that have affected the valuation?
What due diligence checks are required before marketing a farm for sale?
If the sale had fallen through, what alternative strategies would you have considered?
How would you have advised your client if an offer was subject to funding approval?
Barward is a dairy farm - what key factors are affecting the dairy industry at the moment?
You note that in your initial inspection you assessed the productive capacity of the unit, how did you do this?
You mention share farming as an option, what is share farming?
If you went down the tenancy option and improvements were made what would you need to consider?
Why would renting impact on tax reliefs?
You mention marriage value, what is this?
Do you feel that the value obtained reflected special purchaser value?
You mention there was a legal discrepetency - how was this resolved?
In terms of the clawback - why did you advise 25% of uplifted value?
What is the minimum slurry requirements?
