Transfer of entitlements

Date published: 4 January, 2024

For recent changes to this guidance, please see the bottom of the page.

This guidance provides further information about the transfer of Basic Payment Scheme payment entitlements through sale, lease or inheritance.

You must read this guidance carefully before you complete a PF23 – Application to transfer entitlements form.

RPID also has specialist units to help with queries about the transfer notification process. If you need further information after reading this guidance, please contact one of the offices below depending on where your current area office is.

Completed applications should be emailed to RPID unless there are exceptional circumstances. They should be sent from an email address registered to the seller’s business on Rural Payments & Services.

Elgin, Inverurie, Galashiels or Dumfries please email your application to:

STORNOWAY RPID Entitlement Transfer Unit

Email: sgrpid.stornoway@gov.scot

RPID
Entitlement Transfer Unit
10 Keith Street
Stornoway
HS1 2QG

Telephone: 0300 244 8501

Perth, Hamilton or Ayr please email your application to:

OBAN RPID Entitlement Transfer Unit

E-mail: sgrpid.oban@gov.scot

RPID
Entitlement Transfer Unit
Cameron House
Albany Street
Oban
PA34 4AE

Telephone: 0300 244 9340

Lerwick, Kirkwall, Thurso, Golspie, Inverness, Portree, Stornoway, Benbecula or Oban please email your application to:

BENBECULA RPID Entitlement Transfer Unit

E-mail: sgrpid.benbecula@gov.scot

RPID
Entitlement Transfer Unit
Balivanich
Isle of Benbecula
HS7 5LA

Telephone: 0300 244 9600

Please note, that the detailed guidance below does not cover the transfer of entitlements for:

  • business splits
  • business mergers
  • whole holding transfers

A whole holding transfer is where all of the land claimed on the Single Application Form (SAF) and all the entitlements are transferred from the seller to the purchaser after the 15 May and prior to any payment for that scheme year being issued.

An example of a whole holding transfer would be where a 200 Ha farm with 150 region one entitlements and 45 region 2 entitlements is sold on 16 June 2020, the whole 200 ha and all the entitlements are transferred to the purchaser and it has been agreed that the Basic Payment for 2020 is to be paid to the purchaser.

Where businesses are to be merged or split or if you wish to complete a whole holding transfer you should contact your local RPID Area Office for advice on the process. The general procedure would be that where the notification of a merger or split is given to us prior to 15 May in any given year then we will merge or split the numbers of entitlements held by the relevant “parent” businesses in the ratio specified by the business members. There is no requirement for a PF23 in these scenarios, for a business merger you should complete a PF11 and for a business split you should complete a PF14.

Where entitlements are inherited by a member of one business from a person who was a member of a different business then this will not be dealt with as a merger. This will be treated as a transfer, the deadline for notification of 2 [*] April applies and a PF23 is also required. We appreciate that when an estate is settled there may be issues around timing but if the legislative date cannot be met then the transfer will be processed for the following scheme year.

You cannot use a Whole Holding Transfer where a unit is sold along with entitlements after the 15 May in any scheme year and the seller is retaining the Basic Payment for the year of sale.

In this situation entitlements should be transferred using an Entitlement Transfer Application (PF23).

An example of an entitlement transfer would be where a 200 Ha farm with 150 region one entitlements and 45 region 2 entitlements is sold on 16 June 2017 and the seller is retaining the Basic Payment for 2017 and transferring the entitlements to the purchaser for the 2018 scheme year.

Scottish entitlements are only tradable within Scotland: farmers and crofters who have entitlements can transfer these to others, but those receiving entitlements must be farmers within the same region.

1.1 If you own Basic Payment Scheme entitlements you may be eligible to transfer them. This includes entitlements allocated to you in 2015, and those you have since been allocated, have purchased or have inherited.

1.2 You can sell your entitlements, or lease them for a specific period, after which at the end of the lease we will return them to you.

1.3 The person or business that will take over your entitlements must meet the definition of a 'farmer' as determined by the assimilated EU law’ at the time of transfer. That is a natural or legal person (or a group of natural or legal persons) whose holding (production units) is situated within Scotland, and who exercises an agricultural activity.

An agricultural activity means:

  • the production, rearing or growing of agricultural products, including harvesting, milking, breeding animals, and keeping animals for farming purposes
  • maintaining an agricultural area in a state which makes it suitable for grazing or cultivation

or

  • carrying out a minimum activity on agricultural areas naturally kept in a state suitable for grazing or cultivation. In Scotland, this is all land assigned to Payment Regions 2 and / or 3

We may ask the transferee to provide evidence of agricultural activity. This could be one or more of the following:

  • census returns
  • flock or herd records
  • sales receipts
  • veterinary evidence

Refer to the full Basic Payment Scheme guidance sections for more information on agricultural activity.

Please note: If the buyer or lessee does not meet this definition the request to transfer will be rejected.

1.4 A key part of the ‘farmer’ definition is the requirement to have an agricultural holding (production units). The minimum size of a holding is 0.3 hectares. However, to receive payment under the Basic Payment Scheme, an applicant must declare a minimum of three hectares of eligible land. Please note that we may ask for evidence to prove that the transferee is indeed a ‘farmer’ at the time of transfer.

1.5 From 2015 to 2023, all Basic Payment Scheme payment entitlements, including entitlements allocated from the National Reserve, are subject to a two-year usage rule.

Note: From 2024 scheme year the two-year usage rule no longer applies. 2023 is the last year where you could lose your entitlements due to non-activation of payment entitlements in two previous years.

Refer to the Main feature section of the full Basic Payment Scheme guidance regarding the usage rules.

1.6 Payment entitlements can only be used for payment by land assigned to the same payment region as them. For example, you cannot use Payment Region 1 entitlements using Basic Payment Scheme eligible land assigned to Payment Region 2.

1.7 We calculate payment entitlements to two decimal places. This means you can transfer fractions of entitlements that are no smaller than 0.01 hectares.

Usage rules

1.8 From 2015 to 2023, over any two-year period, you must activate (use) all of your Basic Payment Scheme payment entitlements in at least one year.

If you leased your Basic Payment Scheme entitlements out, you will be relying on that farmer to ensure the two-year usage rule is met.

If leased-in Basic Payment Scheme entitlements are not activated during the rolling two-year period they will revert to the National Reserve.

For example:

In the case of a farmer who had 50 Basic Payment Scheme entitlements allocated (and activated) in 2015, who then activates 30 Basic Payment Scheme entitlements in 2016 and 50 Basic Payment Scheme entitlements in 2017, they will have activated all 50 entitlements at least once in the two-year period.

However, if they had activated only 40 entitlements in 2017, they have not activated all 50 entitlements once in the two year period and the 10 entitlements not used will be withdrawn and revert to the National Reserve.

If you have entitlements in more than one region then usage will be considered within each region allocation. Where you have entitlements within the same region which have different values then the lowest value entitlements (owned or leased-in) will revert to the National Reserve first.

You may be exempt from the two-year usage rule if you can prove that you (or your business) were subject to exceptional circumstances or a force majeure event, which prevented you from activating the entitlements for the relevant Basic Payment Scheme year.

2.1 Entitlements can be sold or leased; entitlements can also be transferred to another farmer through inheritance. All these types of transfer can be done with or without land.

2.2 If you wish to trade you can do so through a private arrangement with another farmer or between your representatives (solicitors or advisory firm). Alternatively, you can buy or sell publicly through brokers and auction marts.

2.3 To apply under inheritance the executor should complete a PF23 – Application to transfer entitlements form. Supporting documents must be provided with the application (see part 4.2 for guidance on supporting documentation).

3.1 You can transfer your entitlements at any time but you must tell us about all transfers within the ‘notification period’. This begins on 16 May of the calendar year preceding the first year the transferee could include the entitlements in a claim for the Basic Payment Scheme, and it ends on 2 April in the first calendar year the transferee could include the entitlements in such a claim.

3.2 Help us process your application by giving us as much advance notice as you can. To allow us time to carry out administrative checks against your application, such as a validation check against our field register, please email a PF23 – Application to transfer entitlements form to your Entitlement Transfer Unit as soon as possible.

3.3 Note that if you intend to transfer your entitlements in time for the Basic Payment Scheme you must complete a PF23 – Application to transfer entitlements form and email it to the Entitlement Transfer Unit by 2 April [*].

This is because there is a ‘notification period’ set in Regulation which begins on 16 May of the calendar year preceding the first year the transferee could include the entitlements in the claim for the Basic Payment Scheme and ends on 2 April in the first calendar year the transferee could include the entitlements in such a claim. [*] When 2 April is a Saturday, Sunday, bank holiday or other public holiday, the date falls to the next working day.

[*] When 2 April is a Saturday, Sunday, bank holiday or other public holiday, the date falls to the next working day.

4.1 Please email a fully completed PF23 – Application to transfer entitlements form to your Entitlement Transfer Unit from an email address registered to the seller’s business on Rural Payments & Services. For example the email address of either the responsible person, business member or business representatives including mandated agents / advisory firms.

4.2 You can make multiple transfers (for example, some entitlements with land and some entitlements without land) using the same form, as long you are transferring these to the same business. Otherwise you must use a separate form for each transfer.

5.1 We will pay on entitlements held as at 15 May. So, the effective date of transfer will determine who gets paid in any given year. For example, if you wish the transferee to receive payment, you must inform us on or before 2 April [*]. If it takes place after 2 April, any payment that is due will go to you if you have submitted a valid Single Application Form.

5.2 Note that if for any reason we have to reject your application, and you have submitted it near to 2 April (as explained above), 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.

5.3 Both parties should also be aware that if after finalising a transfer we discover that the seller / lessor should not have been awarded the entitlements, we must take back the appropriate entitlements and ask both parties to repay, with interest, any monies not due to them.

5.4 Recipients of traded entitlements are still subject to scheme conditions and eligibility criteria for payment. In order to receive payment under the Basic Payment Scheme, all farmers and crofters must have eligible land at their disposal, and be engaged in a recognised agricultural activity.

6.1 The trading of entitlements is permitted under ‘assimilated EU law’ which was rolled over into domestic law from 31st December 2020. Article 34 of Amended Regulation (EU) No 1307/2013, Article 25 of Amended Commission Delegated Regulation (EU) No 639/2014 and Commission Implementing Regulation (EU) No 641/2014.

Section Change
Full page Amendments to text for 2024 scheme year

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