When it comes to succession planning, plan early and plan often is the advice from Marty Murphy head of tax at ifac.
Often families rush transfers of farms through too quickly before the incoming generation turns 35 and end up losing out on certain tax relief.
The tax team at ifac sees this time and time again and recommend getting the planning process started earlier to ensure all applicable reliefs are availed of. Murphy recommends that succession planning should be started years ahead of time to ensure the relevant agricultural reliefs can be utilised.
The importance of putting a will in place that hits the right tests was also highlighted.
“Assuming you’re going to live forever isn’t practical in farming because it’s very dangerous,” he said.
He also said that communication is key in succession planning as everyone involved should be aware of the long-term plan.
“Some farms have no successor and others have multiple potential successors,” he explained.
However, he said it is important for the person passing on the farm to inform potential successors of their intentions because in some situations it is assumed and the farm owner can be shocked when the successor has no interest in taking it on.
He encourages farmers thinking about sorting their own succession plans to have the conversation and seek the relevant advice.
SHARING OPTIONS