IT’S perhaps one of the most stressful issues in farming – handing over the reins to the next generations. But it doesn’t need to be that way, according to Scot Howie, the relationship director for Barclays Agriculture.

“Planning for the future is important and while it can sometimes be a tricky subject to address, it’s something that’s worryingly often left at the bottom of farmers’ ‘to do’ lists,” he said.

“Whether it’s because they feel that they have no one to pass the farm on to, they haven’t found the time to speak about it or don’t think they need one, farmers without a succession plan can put themselves and their businesses at risk.

“Research gathered for our recent Farm the Future campaign, which looks at encouraging and supporting the next generation of farmers, showed the average age of a UK farmer is now 55. Although farmers are likely to carry on being the head of the business far beyond the usual retirement age, succession planning remains crucial.

“Without a plan in place, the loss of a senior partner could result in difficult conversations about the future of the business and a potential clash of opinions amongst those left to run the farm. Having an incorrect structure for passing on farming assets can also result in potential tax risks to the business, especially for farms which have diversified.

“Professional advice is an essential part of succession planning and farmers should include accountants, solicitors, business consultants and, of course, their bank throughout the process to develop a solid plan.”

Here are Scot’s five steps to consider:

1. Have frequent, open discussions with all family members involved, or potentially involved, in running the business. Invite an independent ‘chairperson’ who can keep the process moving and give everyone a chance to voice their opinions.

2. Make sure you have good financial planning, both for the next generation and for siblings who don’t work on the farm. They may feel aggrieved if they see all the business assets heading to other siblings.

3. One of the key sticking points for retirement and, therefore, succession, is a lack of pension provision. Any succession plan needs to include pension provision for the next generation, so it doesn’t become an issue again in 30 or 40 years’ time.

4. Formalise a plan and make sure everyone has agreed to it.

5. Involve your successor in the business as much as you can, ensuring your knowledge and expertise is passed on so you’re prepared for whatever life throws at you.