THOUGHT OF THE WEEK

24 May 2016

It’s the dream of many a farmer that his children will take over the farm upon his death. However, in terms of the Subdivision of Agricultural Land Act, agricultural land may not be subdivided, nor may an undivided share therein be transferred to another, without the Minister of Agriculture’s written consent.

What then happens when agricultural land is bequeathed to two or more heirs?

The written consent of the Minister is necessary. If such consent is not forthcoming and the heirs are unable to reach consensus in a redistribution agreement, the estate's executor can sell the property and divide the profit between the heirs; alternatively the heirs can incorporate a company to purchase the property from the estate.

Seek legal advice regarding what is considered to be 'agricultural land' and the tax implications before you attempt buy the farm (with another or in an entity) or bequeath it to heirs.