Creating a farm transfer 'team' will deliver the right results
Published 26/08/2015 | 02:30
Sean and Margaret have reared three children while building up their cattle and tillage farm in the midlands. They are both in their early 60's and they are thinking about scaling back their workload a bit without as Sean says "downing tools completely".
The eldest of the children, John (32), an engineer, is living 16km away with his wife and two children in a house he built on an outfarm belonging to his father. Patrick (29), who has a Level 6 Certificate in Agriculture, is living with his parents and farming side by side with his father. He is taking a wage from the farm and is not named on the herdnumber or on the farm accounts.
Aine (22) is in college with two years left to complete on her degree course and sees herself staying in the local area when she takes up employment.
Sean and Margaret, having initially talked among themselves about their options in transferring the farm, decided that they should set the wheels in motion by bringing up the subject with their children at one of the regular family get-togethers over Sunday dinner.
The general plan for the farm and property transition was to form a partnership between Sean and Patrick to continue to run the farming operation.
The main farmhouse, buildings and associated land would remain in Sean's name while the biggest parcel of land on the farm located across the road from the farmyard is to be transferred to Patrick.
The option to build a house for either Patrick or his parents is to be explored should he get married. John is to be transferred the outfarm where he lives but would continue to make the land available to the main farm partnership in return for an annual rent based on a share of the profits from crops grown on the land.
A smaller outfarm only 3km from the main yard is to be transferred to Aine on the understanding that this land would continue to be made available to the farm partnership for the foreseeable future without interfering with her right to build on it at any stage.
Patrick and John had made some enquiries as to the tax, legal and farm scheme issues that concern the family but were getting confused by the different rules, partnership registration requirements and some conflicting opinions.
Their agricultural advisor suggested that they bring their accountant, solicitor and a local farm partnership expert together to meet the whole family and create a business and asset transition plan.
The advisor assisted the family in drawing up an outline of the transition priorities the key questions that the family members had, in relation to their own tax affairs and other concerns relating to the proposals.
The family then arranged with their accountant and solicitor to attend a meeting to be held in the agricultural advisor's office.
During the meeting the advisor took on the dual roles of main notetaker as well as keeping the meeting to an agenda, which she had worked with the family to draw up in advance.
The circumstances of each family member were examined from a tax, legal and farm scheme perspective to ensure that the transition was completed to the maximum advantage of the family members.
As a result of the meeting there were a number of changes made to the transfer plan with some transfers being postponed in the short term to give family members time to sort out issues relating to their eligibility for various tax reliefs.
All of the family's main concerns were addressed and a clear plan of action was created with follow-on appointments set up with the solicitor, accountant and agricultural advisor in sequence over the following months.
Assembling this 'Farm Transfer Team', as it was called by the family and the advisor, saw the transition of the farm business and the property transfers go very smoothly.
The farm partnership is now fully up and running and the family are confident that the whole process was completed as efficiently as possible.