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SCOPE OF LEAFLET
This leaflet contains information on the transfer of Single Farm Payment Scheme ( SFPS) entitlements. The different categories of entitlements are standard, set-aside, national reserve, and entitlements that come with special conditions. Please make sure that you read this leaflet carefully before you complete form SFPS 1. If you need more information, please contact your Area Office.
IF YOU ARE TRANSFERRING YOUR FARM IN ITS ENTIRETY COMPLETE WITH ENTITLEMENTS TO ANOTHER FARMER, PLEASE USE THE "WHOLE HOLDING TRANSFER" FORM AVAILABLE FROM AREA OFFICES
Contents
Section 1 Are you eligible to transfer your entitlements?
Section 2 The type of transfer
Section 3 When can I transfer my entitlements?
Section 4 The application process
Section 5 Who will receive the payments?
Section 6 Force majeure and exceptional circumstances
Section 7 Legal Base
Annex 1 List of Area Office addresses
Section 1. Are you eligible to transfer your entitlements?1.1 If you have been awarded payment entitlements under the SFPS, you have established them by completing an Integrated Administration and Control System ( IACS) Single Application Form ( SAF) 2005, you have declared at least 0.3 of a hectare, and you have met the rules on usage, you are eligible to sell or lease your entitlements.
1.2 You can do this on the condition that 0.3 of a hectare or more passes our field register validation process, and you are transferring them to another farmer who has also submitted a SAF. You can transfer these with or without land, subject to the conditions laid down in Section 2. You cannot however transfer entitlements received from the National Reserve until you have claimed payment on them for 5 years.
1.3 The person or business that will takeover your entitlements must meet the definition of a "farmer" as determined by the European Regulations at the time of transfer. That is a natural or legal person (or a group of natural or legal persons) whose holding (production units) are situated within Scotland, and who exercises an agricultural activity. (An agricultural activity can include the production, rearing or growing of agricultural products. This includes harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining land in a good agricultural and environmental condition).
1.4 A key part of the "farmer" definition is the requirement to have an agricultural holding or production units. The minimum size of a holding is 0.3 hectares. Farmers who are considering retiring or quitting agriculture should consider how they propose to meet this part of the definition throughout the point of transfer.
1.5 Payment entitlements are calculated to two decimal places. This means you can transfer fractions of payment entitlements that are no smaller than 0.01.
Section 2. The type of transfer
2.1 Without land
You cannot lease entitlements on their own without land. To sell your payment entitlements without land, you must have:
activated at least 80% of the entitlements (e.g. you have claimed payment on them, and you have met the conditions of the scheme to be paid on them); or
given up voluntarily to the National Reserve all the entitlements that you have not activated in the first year of the SFPS, leaving the remaining amount to be sold or leased.
For the first category, if you were not able to meet this condition due to an incident of force majeure or exceptional circumstances, as outlined in Section 6, you should write to your area office and explain the details of the incident.
2.2 With land
To transfer your payment entitlements with land, you must match each entitlement or part thereof with an equal amount of hectares.
2.3 Payment Entitlements with Special Conditions ( PESC)
This type of entitlement can be transferred through sale, lease or inheritance. The "special conditions" refer to the requirement to declare at least 50% of the livestock units on which the entitlement was based. If you transfer all or part of your Payment Entitlements with Special Conditions, the requirement for a livestock declaration also transfers to the transferee. This condition does not apply if the transferee has enough forage to convert these entitlements into standard entitlements.
Section 3. When can I transfer my entitlements?
3.1 You can transfer your entitlements at any time. The only condition is that you must give us at least 6 weeks notice to allow us the time to carry out administrative checks. These checks might include a validation check against our field register. National Reserve entitlements can not be transferred until you have claimed payment on them for 5 years.
Section 4. The application process4.1 You must tell us about all transfers. You can do this by completing form SFPS 1 and sending it to your Area Office 6 weeks before the effective date of the transfer (in other words the date the actual transfer takes place). We hope that we will be able to offer the facility to carry out transfers through SEERAD Online in the future.
4.2 You must provide confirmation of the number of entitlements being transferred, and whether the transfer is with or without land. This confirmation will normally be a copy of the sale or lease agreement, or in the case of inheritance a statement / notification from the executors. If the means of transfer is by means other than by sale or lease, SEERAD might need to discuss and agree with you an appropriate form of confirmation.
4.3 You can make multiple transfers (for example, some entitlements with land and some entitlements without land) using the same form providing the transfers are to the same farmer. A separate form must be completed for each farmer to whom you are transferring entitlements.
Section 5. Who will receive the payment?
5.1 Please note that SEERAD will pay on entitlements held as at 15 May, therefore, the effective date of transfer will determine who gets paid in any given year, including the type of transfer. For example:
If you transfer your entitlements with land to a farmer who has no land, you should inform us by 19 March or earlier. This date allows us 6 weeks to process the application, leaving an effective date of transfer of 30 April. Under the 10 month rule for land eligibility, the date of 30 April is the last possible date that the land could be used to support a claim in any given year, thus allowing for payment to issue to the transferee.
If you transfer only the entitlements, because the transferee already has land, you should inform us on or before 2 April for the transferee to receive payment. If it takes place after the 2 April, any payment that is due will go to you. The date of 2 April is 6 weeks prior to the closing date for the SAF on 15 May. This date may change if 15 May falls on a weekend or a public holiday.
5.2 Please note that if for any reason we have to reject your application, and you have submitted your application near to 2 April, you will not be able to submit another application in time to allow the transferee to claim for the entitlements in that year. In this scenario you will be the one responsible for the use of these entitlements in that year.
Section 6. Force majeure and exceptional circumstances6.1 Force Majeure
This is an event that is so unusual that you could not have foreseen it. Having occurred, and having taken all reasonable steps to mitigate the consequences you could not have done more without "undue sacrifice".
6.2 Exceptional circumstances
By their very nature, these events are rare. We cannot give an exact list of events that might qualify as exceptional circumstances but the European Commission has provided broad examples of the sort of things that might be considered as force majeure or exceptional circumstances. They are as follows:
the death of a farmer/crofter;
long-term professional incapacity;
a severe natural disaster affecting the holdings agricultural land;
the accidental destruction of livestock buildings on the holding; and
An epizootic disease affecting part or all of your livestock (for example, Foot and Mouth Disease).
Section 7. Legal Base
7.1 The trading of entitlements is permitted under Article 46 of Council Regulation 1782/2003, and Article 25 of Commission Regulation 795/2004.
Annex 1. List of Area Office Addresses