Although retirement is an important issue that all farmers have to consider, it is particularly important to owner occupiers as there are many factors to consider.

Several options are on offer including disposing of the farm, letting the property or entering into some kind of joint venture farming arrangement. These all have their advantages and disadvantages, and therefore the option chosen is influenced by a range of personal considerations, capital wealth and taxation to name but a few.

By disposing of the farm, the now retired farmer may also be fully exposed to capital taxation in terms of Capital Gains tax due on the sale of the property and Inheritance tax upon death unless tax planning has taken place. Alternatively, the farmer may wish to let the farmland and buildings, and stay in the farmhouse. This can be done under a Farm Business Tenancy (FBT) and allows the farmer to retain his asset and some element of flexibility whilst generating a revenue stream with a low risk. 

A joint venture farming arrangement with another party such a Contract Farming Agreement (CFA) can allow the farmer to retain their status as a "working farmer" in the eyes of Revenue and Customs whilst no longer actively getting their hands dirty thus potentially preserving tax relieves which may be available on death. However, like all agreements, a CFA needs to be carefully planned so as to bring maximum benefits to all parties involved. 

When considering typical returns an FBT may return between £130 and £170 per acre depending upon land grade, cropping and location whilst a CFA may return a figure in the region of £120 to £150 per acre including Single Farm Payment and Environmental income to the farmer with the contractor supplying all labour, machinery and equipment. At this point it is important to consider risk and reward as whilst a CFA may look attractive on paper, the farmer is fully responsible for any financial loses that are incurred. 

It is also important that any CFA allows flexibility to achieve the best outcome for all parties. An example of this includes the withdrawal of land for environmental schemes which although decreases the cropping area can assist in the longer term management of the holding. For example buffer strips against watercourses and hedgerows.

Therefore having discussed the various issues and options above it is clear that there is no one size fits all option and therefore all factors must be carefully considered before a decision is made.