Guidance

Change of ownership of land under a grant scheme: operations note 14

Updated 22 February 2022

Applies to England, Northern Ireland and Wales

• Publication for Scotland

1. Background to the grants affected

1.1 Creation of new woodland without farm woodland payments

From 2005 until 2015 grants were available from the Forestry Commission for creating new woodland. The Woodland Creation Grant was paid in two instalments, the first immediately after the work had been completed and the second five years later. The ‘obligation period’ (the period in which the scheme Terms and Conditions applied) for the grant was ten years. In this time, the newly planted trees had to be managed to fulfil the terms of the contract. Failure to do so would lead to the recovery of grant.

1.2 Creation of new woodland with farm woodland payments

From 1988 until 2015 grants were available from the Forestry Commission for creating new woodland. During this time there were 3 different grants available, although the rules underpinning each grant were similar, the way payments were made, and the length of obligation period varied. Each scheme had two elements:

• Woodland Creation Grant: See section 1.1 “Creation of new woodland” above for details
• Farm Woodland Payments. These were annual payments, paid over an extended period, the length of which depended on the individual scheme, and the tree species planted. Rates of grant also varied depending on the quality of the ground being planted. These grants were meant as compensation for taking the land out of agricultural production and are often referred to as ‘revenue foregone’ payments

The individual grant schemes and period they were in place were:

Farm Woodland Scheme (FWS)

Introduced in 1988, it ran until 1992. Payments were made annually, for the entire period that the scheme was in ‘obligation’. This varied depending in the species of trees planted:

• for conifers the period was 20 years
• for mixed broadleaves the period was 30 years
• for oak and beech mixtures only, the period was for 40 years

Farm Woodland Premium Scheme (FWPS)

Introduced in 1992, it ran until 2004. Payments were ‘front end loaded’, so rather than being spread over the entire obligation period, they were paid over the first half. The length of the obligation period depended on the species planted:

• for 50% or more conifers (and fast-growing broadleaves such as poplar), the period was 20 years
• for 50% or more broadleaves (but not including fast-growing species), the period was 30 years

Farm Woodland Payments (FWP)

Introduced in 2005 as a pilot in the SW it was extended to the rest of the country in 2007 and closed to new applicants in 2015. The obligation periods were the same as for FWPS. The main difference between these payments and the previous FWPS were that bona-fide farmers received enhanced rates of annual payments. Non farmer’s payments were capped at 150 Euros.

1.3 Creation and maintenance of permissive public access

From 2005 to 2015 grants were available from the Forestry Commission to encourage permissive access through existing and newly planted woodland. Grant was available to help create the paths, build infrastructure and for future maintenance. There were two grants available:

Woodland Improvement Grant (WIG)

This was available for existing woodland or newly planted woodland. A programme of work and associated costs was approved between the applicant and the Forestry Commission. Often the work was spread over a five-year period and grant was paid once work was completed. The period of obligation varied, depending on the overall value of the grant paid out:

Up to and including £10,000	10 years
Up to and including £20,000	20 years
Over £20,000	30 years

Public Access Additional contribution (ACs)

This grant was available for new planting schemes only, where the agreement holder was happy to encourage permissive access across the newly planted area. They were one off amounts, for permitting access on foot with payment made at the same time as the planting grant. If work was required to create and improve access, further funding could be obtained through WIG (see above). The obligation period for this grant was 30 years.

2. Purpose of this guidance

This guidance provides important information to be aware of if you are:

• thinking of selling; or have recently sold a property which includes land under an FC Legacy grant scheme
• for access grants only, you are considering whether to close the grant aided permissive access across your property

This document is intended as guidance only. You should consult your scheme agreement and take legal advice before selling any land covered by a Forestry Commission grant scheme, especially where new woodland has been created.

The Agreement Holder is responsible for ensuring that the Terms and Conditions of their agreement are always fulfilled. Failure to do so is likely to result in the Forestry Commission being required to seek a reclaim of some or all of the grant received.

3. Woodland Grant Schemes without farm woodland payments

If selling a property that has benefitted from the Woodland Creation Grant (WCG) only, and you are still within the ten-year obligation period, it is not a legal requirement for the new owner to succeed (take over) to the scheme, however we would encourage that they do for continuity, especially if there are grant payments outstanding.

When a sale takes place, the person selling the property needs to know that as the original beneficiary of the grant they will be responsible for any reclaim settlement if the Forestry Commission seeks recovery of grant paid

The Forestry Commission would only seek to recover grant if, during the ten-year obligation period:

• the woodland fails, due to lack of management. This may be down to no maintenance of the planting site, a failure to prevent damage from browsing animals e.g. deer, rabbits, farm or domestic stock etc.
• the woodland is removed or damaged by either the original owner or a new owner if the property has been sold

Although there is no legal requirement for a new owner to succeed to a WCG only scheme, we would still ask that the owner informs us of:

• when a property has been sold
• the details of any new owner

Anyone selling a woodland should seek to protect themselves from a potential reclaim. Please refer to seller’s information at section 4.1, specifically the reference to suitable clauses in the sales contract and seeking advice from the Forestry Commission if you are unsure how to proceed.

Refer to Section 4 if the agreement is for WCG and Farm Woodland Payments.

4. Woodland Grant schemes with Farm Woodland Payments

If you are considering selling a property that has benefitted from any one of the farm woodlands schemes listed at Section 2 and you are still within the Obligation Period (see Section 4.4 below) it is a legal requirement that the new owner succeeds (takes over) the obligations under that scheme.

When selling your property, you are required to:

• inform the Forestry Commission within 3 months of the sale taking place
• ensure that the new owner succeeds to the scheme within 12 months from the date the sale is completed

If the new owner fails to apply to succeed to the scheme and submit an application within 12 months of the sale being completed, the Forestry Commission is required to seek the full recovery of all grant money paid while the scheme is still in obligation. Legislation does not allow us to extend this period.

Even after the sale has been completed and a succession has taken place, an agreement holder will remain liable for the repayment of any grant that has been made to them should the grant aided woodland be damaged or removed by the new owner. This liability can be mitigated by including a legally binding clause in the deed of sale to make the new owner responsible for all grant money repayment in this event.

It is important that both the seller and buyer, take note of the following information.

4.1 Sellers

• take legal advice before selling a property. The new owner must succeed to a scheme that is still in obligation. The Forestry Commission is required by law to seek the recovery of all grant monies paid to the original owner if the new owner fails to succeed to a scheme. We recommend that your solicitor ensures that an appropriate clause is included in any sales contract indemnifying you from paying a reclaim of grant once the property has been sold. This clause should place ultimate responsibility for repayment on the buyer
• ensure that the new owner is aware of the need to succeed to the scheme. It is the responsibility of the seller and the buyer to ensure that the succession process takes place. The Forestry Commission will update you as to the progress, or lack of, of any application to succeed to the scheme during the 12-month period. Please be aware that the Forestry Commission has no powers to force the new owner to take over the obligations of the scheme
• contact the Forestry Commission if you or your solicitor are unclear of what is expected of you. We can provide advice on the rules and answer any relevant questions. Once you have made us aware that you are either selling the property or the property has been sold, we will forward you the appropriate forms and guidance. This is for your information, but we would encourage you to pass this onto the person buying your property
• provide the contact details of the new owner or their solicitor once the sale has been finalised. We will use these details to forward to them copies of all the relevant information that they need to know to succeed to the scheme

4.2 Buyers

• ensure that you and your solicitor are fully aware of any forestry grant schemes on the land entered into by the previous owner, or owners, if the property has been sold previously. Grant scheme obligations can remain on a land long after the grants were paid. The most common period of obligation is 30 years but occasionally they may last up to 40 years
• ensure that you fully understand the requirements of the scheme or schemes and any likely implications. For some schemes, it is a legal requirement that a new owner takes over the obligations (commitments) of the scheme. We recommend that sellers ensure that suitable clauses are included in the sales contract to protect themselves from any future, reclaim of grant, these clauses will ultimately transfer the liability to you as the new owner. The most common reasons for the Forestry Commission to seek a reclaim of grant are if a new owner fails to succeed to a scheme, or they intentionally damage or remove the woodland. Some felling of the trees in a woodland grant scheme can take place in the future but this must applied for under a felling licence application
• you must complete an RLE1 form and submit this to the Rural Payments Agency (RPA). This will help you to register as a customer with RPA (if you are not already) and will transfer land from the original owner to you. This can also be carried out on the Rural Payments service
• seek assistance from the Forestry Commission if they or their solicitor are unsure of how best to proceed. You should either contact the administration team dealing with the scheme – details of which the seller will have or email our compliance team mailbox on fs.compliance@forestrycommission.gov.uk
• submit an application to succeed to a scheme within 12-months of the date the sale is completed. The Forestry Commission is required to seek the full recovery of all grants that are still in obligation. The legislation does not allow us to extend this period
• be aware that, by succeeding to the scheme, you are entitled to claim any outstanding payments, provided you continue to manage the woodland. A Forestry Commission woodland officer may be able to offer advice on management of the woodland if you are unsure of what to do. However, what they cannot do is give you a professional view of the success, or otherwise, of the scheme prior to purchase. For this you would need to seek the advice of a professional woodland manager. You can find a professional through the Institute of Chartered Foresters

4.3 What happens if the owner has passed away?

In these circumstances the executors of the estate should notify the Forestry Commission as soon as possible that the ownership of the land will change. This will help the Forestry Commission to arrange to transfer the agreement to the deceased’s successor if the Forestry Commission and the successor agree to the transfer.

If granting of Probate is likely to take some time, we would recommend that the executors or trustees of the estate submit a succession application form in their name as a holding position. This will ensure that an application has been received in the 12-month period from the date the agreement holder passed away. When probate is agreed, the new owner will then be able to complete the succession process and benefit from any outstanding grants that may be available.

If the owner has passed away, the Forestry Commission may exercise its discretion not to recover any funds from the estate of the deceased.

4.4 Obligation Period

The period of obligation for FWPS and FWP Schemes is the period of time after all grant payments have been made but when the rules of the scheme must still be maintained. These schemes have an agreement period of either 30 years, or 20 years from the date of first planting depending on the species of trees planted. The payments for agricultural income forgone are made in the first 15 years.

FWS schemes are different, with payments are made over the full 30 years; or 40 years if slow growing hardwoods were planted.

5. Permissive Access Grants

It is not a legal requirement for a new owner to succeed to scheme that has benefitted from one of the public access grants. Payment of all these grants have finished but sellers and buyers of woodland that have benefitted from one of these must remind themselves of the obligation period that applies to each scheme. These are identified in Section 1.3 above.

The Forestry Commission is required to seek the recovery of any permissive access grants that remain in obligation where the original owner:

• decides to close the permissive access down for any reason, or
• makes it impossible for members of the public to access the area by erecting fences, gates, barbed wire, signage etc.

The Forestry Commission is required to seek the recovery of any permissive access grants that remain in obligation where the new owner:

• after purchasing the property, decides to close the permissive access down for any reason
• makes it impossible for members of the public to access the area by erecting fences, gates, barbed wire, signage, etc.

When selling a property, we recommend that your solicitor ensures that an appropriate clause is included in any sales contract indemnifying you, should the Forestry Commission be required to seek a reclaim of grant once the property has been sold. This clause should place ultimate responsibility for repayment on the buyer. Any buyer should make themselves familiar with any such clauses.

If an owner is intending to sell their property, but the permissive access obligations are putting prospective owners off, you may wish to discuss the situation with the Forestry Commission. Where there is a perceived need, we will consider removing the obligations from the scheme contract. To do so, we would be required to seek the reclaim of the original grant assistance, if this is still in obligation. If you wish to discuss this with us, then please contact our compliance mailbox at: fs.compliance@forestrycommission.gov.uk.

6. Sources of further advice

The Forestry Commission website contains all of the information regarding grant schemes and forms/guidance regarding change of ownership, in particular:

• Legacy schemes
• Successor’s form

If you do not have access to the internet, you can request any of the information from your local Forestry Commission office.

We recommend getting professional advice forestry advice on woodland management and grants. You can find a professional through the Institute of Chartered Foresters