FARMING LAW

FARMING LAW

Succession Planning

Firstly, consult your solicitor for advice on transferring your farm ownership to family members. It is much too important to think you can do it yourself. The process involves legal, financial, tax and personal considerations, all of which have to be done in a prescribed way to manage it successfully. Do it incorrectly and you may incur tax liabilities.

Transferring the Farm to a Family Member

Decide on whom the farm is to be transferred to. Take advice on which method of transfer suits best including tax implications. The transfer can be made by gift, selling, or forming a partnership.

Partnership Option

A benefit to this option is that it need not be confined to family members. So, it can include non-family members. Essentially, a partnership is defined as an agreement between two or more people. Here the non-family members can be other farmers or businesspeople where resources are shared, and they contribute to the farm. Under the partnership agreement, lands and assets are licensed to the partnership, not transferred. This arrangement allows farmers to participate in support schemes and maintain a cohesive management structure of the farm.

There are certain criteria for a farm partnership which your solicitor can go through with you if you opt for this.

Key Matters to take into Consideration when transferring the Farm to a Family Member

·       Does the transferee have the necessary skills, experience, knowledge and is motivated to run the farm business?

·       Consider the other family members in order to avoid challenges or disputes arising. In particular, make sure the provisions in your will as to which of your children may inherit the farm are fair and reasonable and unlikely to cause a dispute. 

·       Itemise all the items that are being transferred.

As mentioned at the outset, consult your solicitor before embarking on any option in transferring your farm to a family member.