If you are considering allowing horses onto your land it is important to seek legal and tax advice. You should consider the most appropriate type of agreement to use as it is not always obvious.
1. Horses for purely recreational use
When there is no business element we would advise a licence or tenancy. There is considerable flexibility. The main difference between a licence and a tenancy is that a tenancy grants exclusive possession to the occupier while a licence suggests shared occupation.
2. Horses for business use
The business need not be an agricultural one. If the use is solely grazing a licence or tenancy would be acceptable. The advantage of a farm business tenancy for a fixed term of two years or less means it ends automatically. Annual, periodic or longer tenancies require at least twelve months’ notice. There is a risk that it might be considered a business tenancy rather than an agricultural tenancy and might acquire security of tenure.
3. Land and buildings for a livery business
This will require a business tenancy which will necessitate professional advice. It must be set up correctly in advance.
4. Basic payment scheme & entitlements
There is always a risk if the wrong type of occupation is allowed as the landlord might fail to show the land is at his disposal and that he cannot comply with the obligations under the basic payment scheme.
What might seem a simple arrangement can have significant implications for land ownership and affect liability to tax and available reliefs.