Take control of uncertainty with an estate strategy

Rural estates are dealing with an increasingly long list of pressures: unpredictable weather patterns, changes to inheritance tax rules, the withdrawal of Basic Payments, increased expectations around environmental delivery, greater regulation and rising operational costs.

Taken together, these factors are making it harder to rely on established operating methods and assumptions about revenues. This is raising questions about how estates, whether privately held or institutionally owned, need to adapt to safeguard their long-term future and ensure they are on a sustainable footing.

A well-considered estate strategy provides a practical means of regaining control and addressing the challenges facing land-based businesses with greater confidence and clarity of purpose. It encourages estate owners to set a clear vision for the future and allocate capital, land and their management efforts in a way that reflects their priorities. In doing so, it helps to build resilience across the business, enabling people to make more informed decisions and take advantage of the right opportunities as they arise.

Why now?

The increase in the inheritance tax relief thresholds which will apply from April 2026, announced just before Christmas, will significantly reduce the tax burden facing many, but larger farming and estate businesses could still face substantial tax liabilities. Our modelling highlights the importance of a detailed review based on accurate valuations, and advanced planning to mitigate liabilities through thoughtful succession planning.

At the same time as the IHT regime has been reformed, farming profitability is coming under sustained pressure. While the Sustainable Farming Incentive (SFI) will open later this year, Defra has said it is considering an agreement value cap to spread the available budget more widely. For larger landowners in England, this points to a future where Government support plays a more limited role in underpinning farm income.

Agriculture is only one source on income on rural estates, but it is also one which requires high levels of capital investment. To reduce risk, it is going to be increasingly important to take a strategic view of land use and diversification opportunities. The focus is shifting to smarter land use – concentrating food production on the land where it can be delivered most efficiently while using other areas in ways that diversify income streams. What this looks like in practice will vary significantly by location and circumstance, underlining the need for a tailored, estate-specific approach.

What exactly is an estate strategy?

An estate strategy guides how a business’s assets are managed, in line with the goals or principles set down by the owner, beneficiary or governing body. It provides a shared reference point for owners, trustees and managers, helping to ensure that individual decisions are aligned with the agreed priorities rather than driven solely by short-term considerations.

A strategy should articulate the business’s overarching direction and priorities for a generation and is typically delivered through successive action plans over a five-year horizon, with a formal review of the current plan at the three-year mark. Action plans deliver the strategy at an operational level and adapt as circumstances change, whereas the strategy remains stable and focused on long-term goals.

Without a strategy document, there is a risk that decisions are made on an ad hoc basis without a clear sense of direction or way to measure success.

What areas does an estate strategy cover?

Strategy development typically begins by defining the overarching goals or principles. For privately owned estates this involves addressing questions such as: What are your personal goals? What are your financial objectives? What activities do you like doing? What legacy do you want to leave behind? What are your hopes for succession?

The questions facing institutional landowners are similar, but reflect the organisation’s financial goals, alongside environmental, social and governance (ESG) objectives.

Once the goals have been established, attention can move to values and ways of working. How does the estate want to do business? What does the brand represent? What sort of culture and behaviours does it want to foster?

The final building block of strategy planning is an assessment of the existing assets – whether residential, agricultural, commercial or other – and the enterprises based on them, to understand how well they align with the estate’s goals. Some assets may clearly sit at the core of the estate’s purpose, whereas others may be better viewed as investments that may be restructured or in some cases sold.

Only once there is a clear understanding of the estate’s direction, purpose and assets should attention turn to implementation. This phase focuses on ensuring the right business structures, governance arrangements and management capabilities are in place to support effective oversight and decision-making.

What is the process like?

It can be a challenging process, as it requires honest reflection on priorities, motivations and expectations. Often, an initial response to questions about strategic goals is a desire to leave the business in a better state than when it was inherited. It is necessary to explore this broad ambition in more detail, through open discussion, to arrive at a more defined set of goals or principles.

This is where an external advisor will add particular value, helping to ask the right questions, test assumptions and draw out what really matters. In practice, the process usually involves a series of conversations with the estate’s owner or governing body and other key stakeholders allowing different perspectives to be considered and brought together in a coherent strategy which everyone is prepared to buy into.

While it is not always an easy process, many people find it brings renewed positivity and focus to the business. It is an approach which is equally applicable to family estates and to land held by institutions with long-term stewardship and investment responsibilities. Having a clear and shared strategic sense of direction makes it easier to take the right decisions with confidence and respond to change in a measured way.

If you would like to talk about what an estate strategy could mean for your business, contact Nick Watson or Hannah Bloxham.