Farm Focus with FBD ... Five things you need to know about farm succession

The process of succession planning can be long and detailed for farmers.

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Teagasc Launches Guide to Farm Succession and Transfer. Contact your local Teagasc office for a copy pic.twitter.com/1bEqWqQiuE

— Teagasc (@teagasc) October 23, 2015

First up, there’s the matter of defining the farm business. Does it need to be separated from an attached homestead? Is there a transfer of tacit knowledge that needs to take place? How much of this vital information to run the business is written down?

Involve your family

Involving all family members in the transfer process from the start will safeguard against potential future problems.

Farming survey: Succession and the next generation still posing issues for farmers https://t.co/fTaOoTxqje

— OliverBurke (@olivergburke) September 19, 2017

What family members are involved on the farm, full-time and casually? Ask what people’s expectations and fears are. Don’t assume them. Has a financial analysis taken place? Can the farm support multiple incomes?

There’s an expectation of fairness but what exactly is fair? This may depend on the circumstances of the siblings. Perhaps one child being put through college and the income from that is equivalent to passing on the farm assets to another child and the resulting income stream.

Make a will early

Making a will now will protect your interests, provide for your loved ones and avoid unnecessary disputes in the future. You will need to consult a solicitor as well as your accountant/ financial consultant.

You can also explore your options in the absence of an identified successor.

Decide on a date of transfer

When would you like a farm transfer to take place? Don’t leave it to ill-health to decide.

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You also need to figure out how much future income will you need for your own retirement. Have you a pension plan? And how will potential future home care needs be shared among siblings?

Consider the tax implications

You will need to consider the tax implications from any farm transfer. How much will the bill be and who will pay it?

Neither you nor your successor will want any nasty surprises along the way, so have that conversation with a tax consultant early and explore potential reliefs from Capital Gains Tax, Capital Acquisitions Tax and Stamp Duty.

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Karen Walsh, Solicitor, who specialises in Agricultural Law, Renewable Energy, Property Law, Wills and Estates speaking on Succession Planning. Video: Larry Cummin / John Delea

Transferring farm ownership down the generations requires significant planning and advice. Noel Baker talks to Alan Jagoe, former Macra President and farmer, Karen Walsh, solicitor, and Austin Finn of the FBD-backed Land Mobility Service about this complex issue. The Irish Examiner Farming Podcast is presented in association with FBD.