Benefits of farm partnerships will outweigh most of the risks
Q I have just finished my course in agricultural college and I feel that I am ready to take over our family farm, which my parents have run since my father inherited it. My father still does some farming and is not ready to retire. I would like to work in partnership with him, if possible, but I think that we need clear boundaries to make it work.
A. Since my last article on the formation of farm partnerships, a number of readers have raised queries with me in relation to farm partnerships and EU agricultural schemes.
Budget 2016 introduced a tax incentive of a €5,000 annual tax credit for those partnerships that transfer at least 80pc of the farm assets to a young trained farmer within three to 10 years of the registration of the partnership.
The financial benefits of forming a farm partnership can be divided into tax benefits and EU agriculture scheme benefits. Having examined some of the tax benefits in my previous article, I will now look at some of the scheme benefits.
The Young Farmer Scheme
Where a partnership is formed and one of the partners qualifies as a young trained farmer, they may avail of this scheme. To do this, they must be added to the existing herd number using an ER1.1 form. The young farmer must be named on the partnership bank account and sign a legal declaration that they have effective and long-term control, either solely or jointly. Payment of the Young Farmer top-up may be obtained on up to a maximum of 50 activated entitlements declared by the partnership in the year of application.
Young farmer national reserve
The Young Farmer National Reserve Scheme was not available in 2016 due to insufficient funding. It may, though, be available in future years based on funds created from the trading of entitlements.