Briefing for Land Agents, Solicitors and Accountants

One of the 18 landowners you advise is considering joining the Ure Dales Landscape Recovery Scheme. They are being asked to take a 20-year commitment and will rely on your professional judgement as part of that decision.

This briefing summarises the scheme in the form we understand is most useful to you: structure, tax, inheritance, tenancy, liability, and exit. It is not a substitute for the full governance document, the surplus-distribution analysis, or the trustmark material — references to those appear throughout.

• Duration: 20 years (2026–2046)
• Parties: Yorkshire Wildlife Trust (YWT) and 18 upland landowners in the Ure Dales catchment
• Funding: DEFRA Landscape Recovery funding (primary); trustmark-backed premium market access, shared-services cost savings, private finance via blended capital (secondary)
• Governance vehicle: a Scheme Lead Entity (SLE) holding the DEFRA contract — the SLE form is being decided at the 30 April 2026 Consortium workshop between four options (see §2)
• Audit: an independent Audit and Standards Committee (ASC), proposed chair EQM or equivalent

• DEFRA Landscape Recovery payments flow to the SLE, not directly to individual landowners. The SLE then contracts with each holding for delivery. Per HMRC guidance on environmental land management payments, these are generally trading receipts of the SLE, with onward payments to landowners taxable as trading income for the holding. Individual cases vary — tenanted holdings, partnerships, sole trader v. limited company structures.
• Trustmark-backed premium market revenue (for holdings producing to sell under the trustmark) is ordinary trading revenue, taxed accordingly.
• Surplus distributions from the SLE to landowner members are structured differently under each of the five distribution models under consideration (Models A–E). Model C (the often-chosen model, 40/60 producer profit share pro rata to contribution) treats distributions as return on trading contribution and we expect these to be trading receipts. Models A and D have significant portions of scheme surplus either retained or directed to community purposes, which may have distinct charitable or CIC-regulator implications.
• VAT — the SLE will be VAT-registered. Most on-scheme transactions between SLE and member holdings are expected to be standard-rated supplies; DEFRA grant element is outside the scope of VAT. Full VAT analysis is being prepared separately.
• Capital allowances for restoration works (fencing, drains, peatland infrastructure) are being assessed against the Structures and Buildings Allowance regime — preliminary indication that most qualify. This requires HMRC confirmation.

• Scheme membership attaches to the holding, not to the individual member — as set out in the sample governance document Article 7.
• On succession, the successor inherits the member rights and obligations subject to acceptance by the successor. If the successor does not wish to join, the holding exits the scheme without penalty to the estate; delivered restoration belongs to the holding.
• Inheritance Tax: the scheme is designed so that Agricultural Property Relief (APR) and Business Property Relief (BPR) eligibility of the underlying holding is not disturbed by scheme membership. Environmental-use APR reform (from Finance Act changes in recent years) extends APR to land managed under environmental schemes — we expect this to support, rather than undermine, relief eligibility, but each client’s estate plan must be tested individually against their specific circumstances.
• Scheme membership itself is not a devisable asset; the right to scheme participation transfers with the holding, not separately.

• Where your client has tenanted land within the scheme, the tenant’s consent is generally requiredto activities that materially alter the use of the land, including some restoration works. The scheme’s design anticipates this — the draft delivery-plan process builds in landlord-tenant negotiation as a first step.
• AHA tenancies(Agricultural Holdings Act 1986): Landlord’s Improvement Notices and tenant compensation considerations apply — advice must be taken.
• FBTs (Farm Business Tenancies): terms vary widely; scheme activity must fit within tenancy-permitted uses or a variation must be agreed.
• Short-term grazing licences: scheme participation may affect licence continuation; this should be discussed with the licensee before scheme entry.
• If your client is a tenant with no freehold interest, scheme membership is likely not suitable without landlord involvement — please flag to the Consortium facilitator immediately.

• Member liability:landowners’ liability is limited to their contractual scheme obligations and any share capital (if the SLE takes company form). The sample governance document Article 12 sets out wind-down provisions.
• SLE liability: the SLE holds the DEFRA contract and bears principal regulatory liability to DEFRA. This is not passed through to members except via agreed delivery-plan breach terms.
• Wind-down:should the scheme need to wind down early, delivered restoration on the client’s holding remains with the holding. Outstanding DEFRA obligations are held at SLE level, not at member level. Full detail in the governance document Article 12.
• Insurance: the scheme will carry professional indemnity and public liability insurance at SLE level. Individual member holding insurance is not affected.

• Exit available without penalty from the end of Year 3 onwards (first tier award cycle), subject to reasonable notice (governance document Article 10).
• Before Year 3, exit is available but may carry pro-rata adjustment of delivery payments received.
• On sale of the holding, exit is automatic unless the new owner wishes to join.
• Restoration already delivered remains with the land.

• ELM / Sustainable Farming Incentive (SFI) — annual flexibility, scheme-wide actions, no consortium governance. Lower ambition, lower commitment depth.
• Countryside Stewardship (Higher Tier) — up to 10-year agreements, individual holding-level, no shared-services structure.
• Other Landscape Recovery schemes (Cairngorms Connect, Upper Wye, etc.) — similar 20-year scale; Ure Dales differs in explicit trustmark integration, explicit surplus distribution governance, and 4 Returns framing.

• Consortium facilitator — contact form — primary contact for scheme-design questions
• Yorkshire Peat Partnership lead — contact form
• YWT Director of Finance — for financial-model and scheme-level tax questions
• The Legal Representative — external legal counsel to the Consortium

This briefing is offered as a structured starting point. It is not a substitute for your own due diligence. The Consortium welcomes challenge — if any point above appears incorrect, out-of-date, or insufficient for your client’s circumstances, please contact the Consortium facilitator directly.

We would rather update the briefing than let a misunderstanding reach your client.