Money Mentor: have we accidentally created a farm partnership?

My brother and I have been farming together for years. When he finished college, we added him to the herd number so he could qualify for the Young Farmer payments.

We thought it was a simple change. But a neighbour said we might have accidentally created a partnership without realising it. Now, I’m confused about what a joint herd number actually means. How it is different from a Registered Farm Partnership, and have we made things more complicated for ourselves? Could this affect our tax, our entitlements or our future plans?

ANSWER: You’re not the only family to end up in this situation. Adding someone to a herd number feels like a small step, but it can have bigger consequences than most people expect. That’s why it’s important to understand the difference between a joint herd number and a Registered Farm Partnership (RFP). On the surface they look similar, but they work very differently behind the scenes.

A joint herd number simply means two (or more) people are named on the same herd number. Families often do this to help a young trained farmer qualify for payments like the Young Farmer Top Up.

But when you add someone to the herd number, you must also open a joint bank account, and the young farmer must sign a form saying they have real control over the farm. These conditions mean that, even if you didn’t intend to, you may be treated as if you are farming in partnership.

That’s where problems can start. If there is no written partnership agreement, the Partnership Act 1890 may apply by default. This assumes the farm income is split 50:50 and it can even treat some farm assets as shared. In simple terms, the law may view you and your brother as business partners whether you meant it or not.

A joint herd number simply means two (or more) people are named on the same herd number

That can affect who owns what, how income is taxed, and how entitlements are treated. In some cases, people can face unexpected tax bills because they accidentally created a partnership on paper.

A Registered Farm Partnership, on the other hand, is much more formal. It is approved by the Department of Agriculture and comes with a full written agreement.

This agreement sets out exactly who does what, how decisions are made, how profits are shared and which assets are included or kept separate. There is no guessing. Everyone knows their role. It also protects both partners if something goes wrong or if someone wants to leave the partnership in the future.

There are also financial reasons why a RFP matters. If your partnership is registered, you may qualify for benefits like Enhanced Stock Relief or a double TAMS investment ceiling, which can make a big difference when you’re planning to invest in sheds, machinery or improvements. You don’t get these benefits with a simple joint herd number.

The way structures are set up also affects schemes, entitlements and BISS applications. A joint herd number is a Department of Agriculture term and can easily cause confusion with your accountant as they may be unfamiliar with how this works in practice.

A RFP avoids this because part of the setup process is checking all scheme details with your accountant and solicitor, as well as herd ownership information and ensuring that land records match the new structure properly.

That’s why understanding the difference is so important. A joint herd number is quick and easy to set up, but it can create big issues later – especially when you’re dealing with tax, wills, loans, grants or succession. A Registered Farm Partnership is more work to set up, but it gives clear rules, formal protection and access to useful supports.

So what should you do now?

Firstly, don’t panic. Lots of families start with a joint herd number and then formalise things later once they understand the risks. The best next step is to speak to your accountant, solicitor and/or agri advisor. They can check whether the way you are currently working looks like a partnership, whether any tax issues could arise, and whether it would be better to move to a RFP or simply tidy up the paperwork.

The important thing is not to leave things in a grey area. When roles, ownership and payments are unclear, that’s when families run into problems. Once everything is clarified – whether you stay as you are or move to a RFP – you’ll have far more certainty and peace of mind.

Joint Herd Number: what it means

Registered Farm Partnership: why it’s different

Philip O’Connor is head of farm support with ifac, the professional services firm for farming, food and agribusiness.