A QUESTION OF INTEGRITY

Simon Ward and Rhoddy Voremberg on the Land Trusts Association

For most landowners it remains a fundamental aim to pass the family estate on to the next generation (and beyond), intact, as a viable concern, and in private ownership not so burdened with public obligations as to be incompatible with proprietorial and family enjoyment.

Sometimes, however, this goal becomes impossible to fulfil, or inappropriate. It may be for want of an heir; it may be that the owner's overriding objective is philanthropic; it may be that tax considerations render continuing private ownership economically unviable; it may be that a fundamental change in the character of the estate or its surroundings render it more suitable for public than for private enjoyment. For centuries, accidents of fate have played their part in determining the future of many landed estates.

In such circumstances the charitable land trust may provide the solution to preserving the integrity of an estate (or simply a particular tract of land), its environmental and aesthetic qualities, and its economic and social contribution to the community, for the benefit of a wider public instead of a private family.

Promoting study of and expertise in the creation and workings of such structures is the objective of the Land Trusts Association (LTA). The foundations of the LTA were laid in the 1970s, initially with a view to promoting the adoption of land trusts as one mechanism to support the burgeoning interest in organic farming, community living activities and the promotion of a means of holding land in a way which could be of direct benefit to local communities. Its dénouement, however, came with the introduction in 1975 of Capital Transfer Tax, which provided an added fiscal incentive for such structures.

The founders of the Association included Sir John Lawrence and a number of like-minded and far-sighted landowners. A committee was formed, with the CLA, NFU and RICS providing continuity of support and representation ever since. The first formal meeting of the committee was in 1979 under the chairmanship of Denis Carter, then a member of the Northfield Committee, who was later elevated to the peerage and at one time Government Chief Whip in the House of Lords.

In the intervening 24 years, it is remarkable how, despite changes in the law and practice affecting both land ownership and farming, the Association’s objectives of facilitating and encouraging the dedication of land to the long-term benefit of the public have remained the Association’s guiding principles.

Although taxation has for countless years been one of the most significant issues affecting landowners and the ownership structures they have adopted, land trusts as an alternative form of land ownership were not born as a tax planning device for landowners. It was Sir Ralph Verney, then Chairman of the Nature Conservancy Council (now English Nature) and a founder of the LTA, who succinctly said that the aim of the Association was to be the promotion of responsibility in landownership; the benefits were to be divested but the responsibilities maintained.

At the time the Association was formed very little indeed was known about the principles and workings of land trusts, and so it had a particularly valuable role to play. A restraining factor in the early 80s to the growth of land trusts was the Capital Transfer Tax rule limiting the amount that could be transferred to a charity tax-free on death. This became a hindrance to landowners who were compelled to break up otherwise economic units in order to meet the then £200,000 limit. It was as a result of representations to the Treasury in 1982, led by the LTA, that the limit to transfers on death was completely removed in the 1983 budget.

If the burden of tax on landowners was one of the driving forces behind the establishment of land trusts, the other was the need for a structure to hold land in trust for the very long term – something that the law relating to private trusts has for centuries sought to prevent.  Charitable trusts, being exempt from the rule against “perpetuities”, provide such a medium and so enable the dedication of property for the public benefit for successive generations, unaffected by the uncertainties of human mortality or accidents of birth.

The committee of the LTA, drawn from like-minded trustees, landowners and professional advisers – lawyers, accountants and surveyors, including representatives of the CLA – continues to monitor political and legislative developments concerning charities, sharing experiences through the publication of Case Studies and Occasional Papers, and by organising seminars.

Further information about the LTA may be found on the Association’s website - http://www.landtrusts.org.uk

Simon Ward is Agent & Secretary to the Edward James Foundation (West Dean Estate) in West Sussex.

Rhoddy Voremberg is Senior Partner with Wilsons, Solicitors, Salisbury, Wiltshire

Caption

West Dean Park and Lamport Hall – both were helped by the Land Trust’s Association.