Wills v Holder: Upper Tribunal overturns agricultural tenancy succession ruling

The Upper Tribunal has overturned a decision granting David Holder succession rights to a Gloucestershire farm, ruling that income from agricultural contracting work carried out elsewhere could not automatically count towards the statutory livelihood condition.

In Executors of Major Michael Thomas Noel Hamilton Wills v Holder [2026] UKUT 409 (LC), the Lands Chamber allowed an appeal by the landlords of Clements Farm, set aside the First-tier Tribunal’s decision and remitted Holder’s alternative application for reconsideration.

The dispute arose under the Agricultural Holdings Act 1986, which allows certain close relatives of a deceased agricultural tenant to apply for a direction entitling them to a new tenancy. Applicants must generally demonstrate that their principal source of livelihood came from agricultural work on the holding for at least five years within the seven years preceding the tenant’s death.

Holder had worked at Clements Farm throughout his adult life. His father, the tenant, died in September 2021. Although the landlords accepted that Holder was suitable to become the tenant, they disputed whether he met the statutory livelihood condition.

The farm comprised approximately 56 hectares of arable land and formed part of an agricultural unit. Holder also owned Quarry Farm, a separate 126-acre farm where his wife undertook most of the farming activities. Profits from Quarry Farm did not qualify towards the livelihood test because it did not form part of the same agricultural unit.

The family partnership also operated an agricultural contracting business, undertaking work for other farmers. The business was based at Clements Farm, where its machinery was stored and maintained and its fuel kept.

The First-tier Tribunal had concluded that the contracting enterprise was agricultural work on the holding, notwithstanding that its operations took place on customers’ farms. It considered the business’s close operational links with Clements Farm sufficient to treat its income as qualifying income.

The Upper Tribunal rejected that interpretation. It held that the statutory test required the tribunal to focus on where the applicant carried out the agricultural work, rather than where the business was based or how closely its activities were connected to the holding.

The tribunal considered section 36(6) of the 1986 Act, which permits certain work carried out from a holding to count towards the livelihood condition where the landlord has approved it in writing. The provision supported the conclusion that off-holding work could not simply be treated as qualifying work under the original test because the business operated from the farm.

The tribunal also rejected the First-tier Tribunal’s reliance on earlier cases concerning partnership drawings. Those authorities involved applicants whose work was carried out on the holding. Holder’s income also derived from contracting work elsewhere and a separate beef enterprise, making it necessary to distinguish between qualifying and non-qualifying sources.

However, overturning the finding that Holder was fully eligible did not resolve the case.

Under section 41 of the Act, an applicant who does not fully satisfy the livelihood condition may still be treated as eligible if the condition is satisfied to a material extent and it would be fair and reasonable to allow the application for succession.

The First-tier Tribunal had rejected this alternative claim using an apportionment that attributed 70% of the relevant arable and contracting income to qualifying work. It found that the required level of material satisfaction had not been established.

The Upper Tribunal did not disturb that assessment merely because it might have reached a different conclusion. Instead, it identified a flaw in the reasoning: the First-tier Tribunal had failed adequately to explain why the wider connections between the contracting business and the holding, which had informed its original decision, could not also be considered when assessing the alternative application.

The tribunal therefore held that the refusal of the section 41 application could not stand.

It set aside the First-tier Tribunal’s decision, revoked the direction granting Holder a succession tenancy and dismissed his application under section 36. His section 41 application was remitted to the original panel for reconsideration.

The tribunal stressed that the panel remained free to reach the same conclusion or change its decision. Further submissions should not be incurred unless the First-tier Tribunal specifically requests them.

The ruling clarifies the distinction between agricultural work undertaken on a holding and work carried out elsewhere by a business based there, while confirming that an alternative application under section 41 must be assessed through a properly reasoned evaluation of the relevant circumstances.