Sole traders and fixed assets. Are they owned by the business owner?

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I have posted here before recently regarding MIL’s will.

There is a dispute over a parcel of land. It isn’t specifically mentioned in the will. We’ve had solicitors say that it is SIL’s as she gets the residue of the estate.

MIL and OH we’re in partnership together and she gifted him the business in its entirety to OH in her will so he is now a sole trader. It turns out that this parcel of land was bought through the business and is on the business’ balance sheet as a fixed asset.
We have known this for a while but didn’t think it held any weight however upon further inspection by a solicitor, apparently it does.

I’ve googled and googled some more and all I can really fathom is that OH should at least have ‘absolute control’ of the asset. It doesn’t say whether he owns it though. Can anyone shed any light?

You’d be best speaking to a farming accountant but my gut is that the asset being on the balance sheet indicates legal ownership but not necessarily beneficial ownership.

@LouiseTrees so he’d have control over how it was used but the other beneficiaries would still own their share?

It’s a stinker as OH put a substantial amount of his personal money (inheritance from his grandad) into buying said parcel of land. His mother had promised that it would be his one day. He’s worked for over 25 years for very little pay and been thrown to the lions.

Like I said you need to speak to the lawyers/accountants in this one. I’m not an expert.

How was the I award the business to him worded?

‘I give all my interest in the farming business trading as MIL’s name (the business) to my said son (OH’s name)

This gift includes all goodwill stock vehicles machinery plant and other equipment. All book debts money standing to the credit of the business at any bank or elsewhere and the benefit of all contracts.

OH wasn’t in partnership with her when she wrote this will however and OH’s accountant believes the land is his. But we’ve been told different things and don’t know who to trust.

It’s not about who to trust. If it’s not clear cut it’s about what interpretation the courts go with. I’m an accountant ( well an auditor but we have accounting training) but not in farming and I side with DH accountant, my husband is an accountant and he says it’s touch and go (because of the unhelpful listing of other things it includes) but worth staking a claim on it and seeing if it sticks.

He needs the land presumably to service the contracts and receive their benefit.

As a side note, why is the sister contesting this? It sounds so unfair to your DH

They’ve been advised to go for mediation but I don’t think this will work. It’s not so much SIL who is the problem, we get on well with her and she’s always said if this parcel of land was hers that she’d share ownership of it with OH. BIL however is a nasty piece of work. We have it on record that he’s a liar (we’ve recently been in receipt of an assessment of need document to get planning passed where he has lied through his teeth to the inspector for his own gain) he has a criminal record for beating OH up, him and his partner bully us, our children, he blocks gateways, has taken agricultural buildings off OH without permission.

OH has tried to seek a tenancy which has proven very expensive. His brother has been incredibly awkward about it all. The tenancy agreement has been amended several times to try and keep BIL happy but the heads of terms became more and more controlling. Despite OH paying a fair rent at the moment without even having a tenancy in place (as recommended by land agent) BIL wants more money per acre and wants the rent backdating to the date of MIL’s death! He’s also expressed a wish to have OH off the land before the proposed 5 year tenancy renewal date. ‘You’ll be off much sooner if I have my way.’ We didn’t want it to end up with mediation or court but we feel as though we’ve no choice.
I just hope with the evidence we have stacked against him and the fact that OH has worked to his detriment that the courts look favourably. Not to mention that BIL has inherited twice now (OH’s dad died before he was born, BIL is 10 years older) and has his own successful business.