Succession planning – seek tax advice - Teagasc | Agriculture and Food Development Authority

As part of Generational Renewal Week, farmers are being urged to seek expert taxation advice before embarking on any asset transfer.

A critical step in effective farm succession planning, Collaborative Farming Specialist at Teagasc, Ruth Fennell stressed that careful tax planning can significantly reduce financial strain during a farm transfer.

Speaking ahead of this evening’s Taxes and Reliefs Webinar, Ruth Fennell explained: “Before any handover takes place, it’s essential to carry out a taxation calculation.

“Timely advice from your agricultural advisor, accountant and solicitor can help you plan the transfers to reduce the tax burden. With the right advice and planning, it may be possible to mitigate what could otherwise be a large tax bill.

“With good advance planning and preparation, the issue of taxes should not have a major negative impact on the farm business transfer,” she noted.

Tax liabilities, she explained, often arise from two key events in farm succession: the transfer of business assets – such as land, buildings and payment entitlements; and the formal conclusion of one business and establishment of another. By adjusting the timing or structure of a transfer, many of these liabilities can be minimised.

“Three main capital taxes typically apply during a change in farm ownership, Capital Gains Tax, Capital Acquisitions Tax, and Stamp Duty. These focus primarily on farm capital assets, including land and buildings. While items such as livestock and machinery are generally not subject to capital taxes, they may carry income tax implications,” Fennell added.

For more information on navigating the taxes and reliefs associated with farm transfers, view the Teagasc publication to accompany Generational Renewal Week here.

Supporting the Succession Planning Process

Along with support from Teagasc advisors and specialists, Ruth Fennell also referenced an important initiative from the Department of Agriculture, Food and the Marine, the Succession Planning Advice Grant.

The scheme provides up to €1,500 in financial assistance, covering 50% of professional advisory costs related to succession and inheritance planning. To qualify, applicants must be aged 60 or over, have farmed at least 3 hectares of land for a minimum of two years, and meet other eligibility criteria. More information on the grant is available on the Department’s website.

Taxes and Reliefs Webinar

Today, Thursday, September 11 at 7.30pm, Teagasc will host the final webinar in its series of Generational Renewal Week. This webinar will navigate the taxes and reliefs associated with farm transfers with Hugh MacEneaney, Financial Specialist, Teagasc.