Managing a sporting estate in a part of the world such as the highlands of Scotland is not as simple as it might appear to the uninitiated. This article gets into the terrain close-up.

For some wealthy individuals, a way to enjoy their lifestyle may involve relaxing on a yacht, or enjoying a summer house in Italy, skiing in the Swiss Alps or driving a classic Ferrari. For others, it is about collecting fine art and laying down - and even drinking - classic Bordeaux wines. For some such persons, however, the activity can involve that most traditional British pursuit, shooting game birds in England and, especially, Scotland. The maintainance of landed estates that are set up for shooting as well as other activities is not a straightforward matter, and with that thought in mind, Taylor Wessing, the international law firm, and Grigor & Amp, another law firm, provide analysis on somee of the relevant issues. The authors of this piece are Donna Skelly, partner at Grigor & Young Solicitors and Luke Callaghan, senior associate in the landed estates team at Taylor Wessing. The editors are grateful for this contribution and invite readers to respond.

Earlier this month, no doubt to coincide with "The Glorious Twelfth", estate agents Savills and Davis & Bowring  announced their joint instruction on the sale of "Scotland's most expensive sporting estate", the Tulchan  Estate on Speyside, which is on the market for offers in excess of £25 million ($31.9 million). According to Savills' press release, the Tulchan Sporting Estate comprises 21,000 acres and includes eight miles of double bank fishing on the Spey, a first class pheasant shoot and two grouse moors.  It is safe to say that the sale of a Scottish sporting estate of this size and value is an infrequent event as many of the Scottish estates will have vested in the same family for hundreds of years.  Although it is difficult to say with any certainty (as many of these sales are carried out privately) it is estimated that there will only be between 15 to 20 Highland estates that are sold annually with, in very general terms, a combined sale price of £60 million.   

A sporting estate, be it located in England, Scotland or Wales, can offer a buyer the opportunity to combine a capital investment with a passion for country sports.  Estates are, however, one of the more complicated class of trophy asset as they can encompass a wide range of different commercial activities aside from hunting, shooting, fishing and agriculture.  These activities may be anything from a simple furnished holiday-lets business to wind and solar farm developments or hotels or other equestrian businesses.  It is therefore imperative that before any offer is made a buyer obtains specialist and experienced advice from solicitors, accountants and rural agents who have a thorough knowledge of the particular type of sporting estate that is being sought and the issues that may affect its value.

In Scotland, the value of an estate focusing primarily on grouse will be based on its historic game books which will carefully narrate each day’s sport.  Moorland estates average around a capital value of £5,500 per brace of grouse shot.  In addition to the purchase price, the legal and conveyancing costs, recording dues of titles and the land and business transaction tax associated thereto (to name a few matters) must be taken into consideration.

The annual running costs of a grouse moor in particular must also not be overlooked.  For an average £10 million estate of around 15,000 acres a figure of £400,000 would not be unusual.  The employment of keepers, stalkers, ghillies, beaters, shepherds (if sheep are required for “tick–mopping”) cooks and housekeepers; the purchase and maintenance of moveable equipment such as Argocats, hill and snow bikes, Land Rovers, tractors, clothing, guns and ammunition; the repair and installation of fencing, roads and tracks, private water supplies, drainage and trees; maintenance of buildings such as “The Big Hoose”, staff houses, game larders, (often Victorian and beautiful - but Listed with all of the associated statutory headaches).That said, and provided that an owner does not mind temporarily parting with possession of the estate for commercial gain, a grouse moor can still offer some income benefits for an owner.  If you are “a Gun” a brace of grouse costs (on average) £180 to shoot.  An average two-day shoot for, say, eight guests can cost the party (and benefit the estate) up to £50,000 if accommodation is also provided.

In comparison, the majority of Sporting Estates that are bought and sold in England and Wales tend to be diversified agricultural estates on which a shoot is run.  Again, seeking professional advice early on in the structure of the purchase and the tax consequences is essential.  As with the Tulchan Sporting Estate, if the estate is owned and run by a company then a buyer may wish to consider acquiring the shares, if that is an option, as this could offer a significant Stamp Duty Land Tax saving; albeit that there may be other tax disadvantages further down the line depending on how the estate is then held and later sold.  A corporate acquisition, as against a straight land purchase, can involve considerably more legal work, it may take longer to complete and the professional fees will invariably reflect that.  

There are numerous small issues that should also be considered at the point of negotiation but which can sometimes be overlooked.  For example, a purchaser should bear in mind that the employees of the estate are very likely to be transferred across to them, whether or not it is a land or company purchase, so there should be discussions early on to ensure that the liabilities and costs of any redundancies (if any) are dealt with as part of any negotiated deal.  Furthermore, if a purchaser is buying farmland with the intention of establishing a new shoot, then particular care should be taken to investigate the title to the sporting rights to ensure that they are included within the land.  Although it is a presumption that the sporting rights are included within the freehold land, a landowner is free to sell off or lease those rights to a third party and a review of the Land Registry title will not always reveal this.

A buyer's reasons for acquiring a sporting estate can be varied: they may be motivated by the weak pound, the possibility for offsetting of carbon emissions, the tax benefits in investing from sources overseas, or a simple wish to carry out good ecological and environmental works.  It may also be seen as a good opportunity for investment with the average value of farmland in England having comfortably doubled since 2006; albeit that there is now some uncertainty in the sector following the Brexit referendum and concerns over the long term future of direct payments and agri-environmental schemes. 

It is probable that whilst all of these may be factors that influence the decision, they are unlikely to be the main driver as Donna Skelly explains: "There is no greater sport on earth than standing in a butt on a warm August day amongst purple heather cropped by violent winter storms, full of adrenaline waiting on the beater’s line and dogs moving over the hill towards you with their cries of 'flags up!' and 'over'. Listening to the guttural call of the grouse out of the window :- which, once heard, is never forgotten 'go back, go back, go back'.  Flights from London Heathrow to Inverness only take 90 minutes!"