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Industry Bodies Launch Guidance on Determining Compensation at Way-Go

Industry bodies representing agricultural landlords and tenants from across Scotland have today launched new guidance aimed at giving secure 1991 Act tenants greater clarity as to the potential way-go value of their business.
The move follows the issuing of other joint guidance by the NFUS, SLE and STFA in relation to limited partnerships, rent reviews, tenants’ improvements, landlord’s/tenant’s obligations and succession/assignation.
The latest guidance is based on existing legislation, but it emphasises that the new relinquishment and assignation for value provisions in the Land Reform (Scotland) Act 2016 will offer an additional option for those seeking to end their tenancy once those provisions come into force.
The main purpose of the guidance is to help tenants who may be considering retirement to plan on the basis of a clear understanding of the way-go compensation that would be due to them. 
It responds to a recommendation made by the Agricultural Holdings Legislation Review Group in 2014 concerning the need for a formal code of practice on determining compensation at way-go so as to assist elderly tenants who may otherwise be discouraged from retiring due to uncertainty.
Welcoming the move NFUS President Allan Bowie said – 
“Tenant farmers often have a great deal of value locked up in their farms, and effective retirement planning is impossible unless they have complete clarity about this”. 
“The timely transfer of tenanted farms to the next generation is vital to maintaining dynamism in our industry, and this guidance will help to facilitate the release of land for use by younger entrants to the sector”.
Scottish Land & Estates Chairman David Johnstone emphasised his organisation’s support for the guidance – 
“It is essential that tenants plan ahead so that those seeking to retire can do so. Using this guidance will provide a clearer and smoother process for all involved, and provide wider industry benefits."
“The guidance will also be helpful to landlords for their own business planning purposes, since they may need to manage cash flow within the business in order to meet way-go expectations”.
STFA Chairman Chris Nicholson emphasised the importance of obtaining good advice –
“With the passage of the Land Reform (Scotland) Act 2016 tenants will shortly have alternative ways open to them to realise their value in the tenancy if they wish to do so.”
“Any tenant who is thinking about retiring should obtain good professional advice before deciding whether to accept a way-go package under the current legislation or wait until the new legislation comes into force”.
The guidance was prepared with support from the Scottish Government’s Independent Adviser on Tenant Farming, Andrew Thin. A copy is available below, or may be downloaded from

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