I8.369 Freeholds subject to agricultural tenancies
As mentioned at I8.367, the valuation issues are different and perhaps simpler with respect to agricultural tenancies in England and Wales granted after 31 August 1995 which do not have security of tenure; these are considered below, after the position for other tenancies.
A freehold interest subject to an agricultural tenancy protected by the Agricultural Holdings Act 19861 does not give the owner the right to vacant possession (as the tenant cannot be evicted) and the value of his interest will be considerably less than the full vacant possession value. The theoretical valuation arguments are similar to those for the tenant2. There is a potential special purchaser (in this case the tenant) who might pay a special price to acquire a marketable investment with vacant possession, but with the important difference that the interest is assignable and can therefore be sold, whereas the tenancy is usually not assignable.
Experience has shown that values of tenanted land round the country, as negotiated with the local District Valuers acting for HMRC, vary considerably. Discounts from the vacant possession value ranging from 20% to 50% are found.
In one of its written submissions to the Northfield Committee HMRC made some interesting comments. Their statement on the valuation of tenanted agricultural land is set out below3.
'It is not possible to give precise answers to your questions because market factors are involved and the interplay of market forces is very variable. Thus on the question of the difference between vacant