Lump Sum Exit Scheme – Application deadline approaching
The deadline to apply for the Lump Sum Exit Scheme is 30th September 2022. The application window will not reopen, so action is required now before the opportunity is lost.
The Lump Sum payment provides those leaving farming with a one-off payment instead of the BPS payments they would have received to 2027, if they continued in the industry. The applicant receives payment once they meet the eligibility criteria, which must be completed before 31st May 2024.
If you are not yet committed to exiting farming in the next 18 months, but it could be a possibility, applying to the Lump Sum Exit Scheme now allows you to reserve your position. Once enrolled, you can still apply for BPS as normal in 2023. If you meet the eligibility criteria by 31st May 2024, you will receive the Lump Sum less your 2022 and 2023 BPS payments. However, if you continue farming at this point, you won’t receive the Lump Sum but will receive the BPS payments from 2024 to 2027.
There are factors to bear in mind:
- the Lump Sum payment will be the average of BPS receipts between 2019 and 2021, capped at £42,500, multiplied by 2.35 – it is worth comparing your estimated BPS income over the next 5 years and your Lump Sum payment.
- Lump Sum Exit Scheme payments are likely to be subject to Capital Gains Tax
- Lump Sum recipients cannot continue any Countryside Stewardship Agreements or enter schemes under ELMS, though they may continue working as a contractor or labourer on another party’s land.
If the Lump Sum Exit Scheme is of interest to you, please do not hesitate to contact a member of the team to discuss further.
The Lump Sum Exit Scheme Timetable
| Sept 2022 | Apply for the Lump Sum Exit Scheme |
| 30 Sept 2022 | Applications for the Lump Sum Exit Scheme close |
| Nov 2022 | Lump Sum Exit Scheme Payments begin |
| 31 May 2024 | Deadline to meet the eligibility criteria and qualify for payment Eligibility Criteria • surrendered BPS entitlements to RPA • transferred agricultural land ‘at their disposal’ on 17th May 2021 by: – selling or gifting the land to the next generation or a third party – letting owned land under a Farm Business Tenancy with a term of at least 5 years – where land is rented; ending or assigning the tenancy or completing a succession. Parties may keep the Farmhouse and any other non-agricultural property, land that is ineligible for BPS, up to 5 ha of agricultural land and any land entered into a woodland creation scheme. |
