Financier urges farmers away from property
At the Positive Farmers Conference at Limerick, Killian Keane of Davy Stockbrokers advised farmers to keep in mind the tax perspective when making investments.
He said they should compare the benefits from tax-free growth in pension funds to the income from a business venture or rental income from property, both of which can incur 42% tax liability.
He said there are also considerable tax advantages when passing on pension funds to the family through inheritance, over other forms of investment or property.
He explained that a farmer aged between 30 and 40 can invest up to 20% of his income, to a maximum of €254,000 per annum in a pension fund, increasing to 25% for a farmer aged over 40 year, and 30% over 50 years of age.
There are options to invest in stand-alone property, syndicated property or equity funds, through a pension.
He advised farmers to consider family partnerships through which funds can be gifted to children, in order to reduce inheritance tax liabilities - by 50%, for example, where half the wealth is held in children’s funds through a partnership of which the parents can retain control, for the children’s benefit.
Kevin Lucey of Global Capital Management told the farmers that long term net returns of 20% per annum are achievable on the stock market with a long-term opportunistic value approach, with rigorous research to identify companies trading at less than their intrinsic value.
Between 500 and 600 attended the Limerick conference.
