Get your ducks in a row for a farm trans­fer

How does farm trans­fer af­fect pen­sion en­ti­tle­ments? Put it on your check­list

Irish Examiner - Farming - - NEWS - Karen Walsh

When a fam­ily farm is be­ing trans­ferred to a child or a rel­a­tive, the par­ties in­volved in the trans­fer will need to plan and pre­pare in ad­vance. This is very im­por­tant; the trans­feror and the trans­feree need to be aware of the im­pli­ca­tions of trans­fer­ring the farm. In this ar­ti­cle, we will try to set out some of the prac­ti­cal con­sid­er­a­tions that the par­ties should con­sider be­fore the trans­fer takes place. Should you trans­fer the en­tire farm or only part?

It is ad­vis­able to in­volve all your chil­dren in the process and com­mu­ni­cate to them your plans in re­spect of the trans­fer of the as­sets.

If one child or rel­a­tive has been farm­ing the land with you, it may make sense that the lands are trans­ferred to them, but you may also need to pro­vide for your re­main­ing chil­dren, and you will need to look into the best way of do­ing this.

For in­stance, you may wish for sites to be left on the farm which are to be trans­ferred to your other chil­dren.

Will you be ad­e­quately fi­nan­cially pro­vided for if a farm trans­fer takes place? You may wish to look into what con­di­tions should be at­tached to the farm trans­fer. It is very com­mon in farm trans­fer that a right of main­te­nance or right of res­i­dence is a con­di­tion at­tached to the trans­fer of the farm. This will al­low you to re­main in the farm house for the re­main­der of your life, and for you to be fi­nan­cially looked af­ter by the trans­feree for the re­main­der of your life. It is im­por­tant to ex­plore the trans­fer of the farm­lands from all per­spec­tives, in­clud­ing ob­tain­ing ad­vice from an ac­coun­tant or a tax con­sul­tant as to the most tax ef­fi­cient way of trans­fer­ring the farm.

It is ad­vis­able to start mak­ing ap­point­ments with pro­fes- sion­als as early as pos­si­ble, such as an ac­coun­tant, tax con­sul­tant and a so­lic­i­tor. You may also wish to take ad­vice from an agri­cul­tural con­sul­tant.

It es­sen­tial that both par­ties to the trans­fer get sep­a­rate le­gal ad­vice and sep­a­rate tax ad­vice.

If there is a mort­gage, for which lands are held as se­cu­rity, you should con­tact the fi­nan­cial in­sti­tu­tion, to ob­tain their con­sent to the trans­fer. This should be done as early as pos­si­ble.

If you are trans­fer­ring the land, it is ad­vis­able to look into your po­si­tion in re­spect of your pen­sion. As farm­ers are self­em­ployed, they should es­tab­lish their po­si­tion with the De­part­ment of So­cial Pro­tec­tion in re­la­tion to their PRSI con­tri­bu­tions, and el­i­gi­bil­ity for the Con­trib­u­tory State Pen­sion. Spouses of farm­ers should also make en­quiries in this re­spect.

There are many tax im­pli­ca­tions of trans­fer­ring a farm, and it is ab­so­lutely im­per­a­tive that you get ad­vice from a tax con­sul­tant in this re­spect, be­fore en­ter­ing into a farm trans­fer. There are a num­ber of re­liefs that the par­ties to the trans­fer can po­ten­tially avail of. It is im­por­tant to get tax ad­vice at an early stage as to whether the par­ties will qual­ify for these re­liefs. There are also quite a num­ber of le­gal im­pli­ca­tions as re­gards trans­fer­ring a farm, and we would rec­om­mend that you in­struct a so­lic­i­tor early on, to con­sider the ti­tle.

There may be bur­dens on the ti­tle, such as rights of ways, which your so­lic­i­tor will ad­vise you on. Cer­tain bur­dens on the ti­tle can be po­ten­tially be re­moved, and it is ad­vis­able to deal with these well in ad­vance of the trans­fer.

If the farm is be­ing trans­ferred to you, it es­sen­tial that you are aware of to what ex­actly you are tak­ing on. It would be ad­vis­able to ob­tain the ac­counts in re­spect of the busi­ness or the farm as you need to be cer­tain, as to what li­a­bil­i­ties and debts you are tak­ing on once the trans­fer has been com­pleted. Poor com­mu­ni­ca­tion be­tween fam­ily mem­bers when a busi­ness is be­ing taken over is com­mon, and it is prefer­able that any po­ten­tial is­sues are ironed out ahead of the trans­fer tak­ing place.

In this re­spect, it is again of ben­e­fit to have in­structed pro­fes­sion­als at an early stage, in or­der that the trans­fer can pro­ceed smoothly. Prepa­ra­tion and plan­ning are key, be­fore a farm trans­fer takes place and it strongly rec­om­mended you take ad­vice from a so­lic­i­tor and a tax con­sul­tant at an early stage be­fore pro­ceed­ing with a farm trans­fer.

Get your ducks in a row: Things to line up be­fore a farm trans­fer in­clude who get what, is the tran­feror ad­e­quately pro­vided for, it the trans­fer tax-ef­fi­cient, what are the fi­nan­cial im­pli­ca­tions for both sides?

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