Succession: How to secure the future of your family farm

Free succession webinar: Meet legal and business experts, plus a father and son who have successfully transferred their farm

Fri, 03 Dec, 2021 - 12:01

There’s a lot to consider and it can seem overwhelming at first, says Declan McEvoy, Head of Tax at ifac.

But if you think of succession planning as a process instead of an action, it makes it much less daunting.

Ahead of ifac’s Succession Webinar this December, Declan shares his top tips for planning your 'Path to Succession'.

The most obvious thing to think about is how to secure the future of the farm, but don’t forget about the need for a sustainable income for both the retiring and the next generation. It’s a good idea to find out the wishes of other family members or stakeholders and take these into account.

Whatever the size of your family and whatever the circumstances, this much is true — the better the communication between everyone, the smoother the process.

IFAC's Farm Succession webinar on Thursday, December 9, 8-9pm, offers invaluable expert advice on securing the future of the family farm.

Are you the outgoing generation?

Having worked on the farm all your life, you’ll need to prioritise your own financial security before transferring assets. You’ll need to think about the following:

Your timeframe to exit the business?
What level, if any, you wish to continue to be involved on the farm?
Will you need or want to continue to draw income from the business?
What will happen to the farm dwelling house?
Will you need to avail of the Fair Deal Nursing Home Scheme?
What are your wishes for your other children?

Are you the incoming generation?

If you’re the incoming generation, you’ll need to think about your own situation and your aspirations.

If you have a partner or spouse, their views are really important also.

You’ll need to consider the following:

Can the farm afford to support your desired lifestyle (and possibly the outgoing generation’s)?
What’s your expectation on working hours, holidays, time off etc.?
There may be additional benefits to your wages that should be examined from a reward point of view e.g. use of jeep/car, fuel, electricity, health cover etc.
Can the farm meet your parents’ wishes to support siblings if applicable?

What if there’s no successor?

If there’s no willing successor in the immediate family, there are other options that you may wish to consider:

Partnership
Share Farming
Transfer to niece/nephew
Leasing
Possible sale (part or full disposal)

Some of the above solutions may be an option where the landowner wants to take a step back from the day-to-day management of the business or in situations where an interim solution is needed until a successor becomes old enough to take over the farm.