Succession Farm Partnerships are a new addition to the suite of Collaborative Farming Options available to Irish farmers from 2017 onwards.
A Succession Farm Partnership uses an income tax incentive to encourage the transfer of farm assets such as land, farm buildings, CAP entitlements, livestock and machinery from the existing farmer to the successor(s) within a 3 to 10 year window from first registration.
The successor must be less than 40 years of age in any year that the tax credit is claimed. This measure encourages farmers to put a definite succession plan in place around farm asset transfer.
Valerie Woods from the partnership registration office said: “This scheme has been developed to encourage the intergenerational change essential to secure the future of farming. By facilitating collaborative working in a way that assures the long term financial security of the farmer and the successor, this scheme will increase on-farm efficiency by supporting best practice in succession planning.”
Farmers who form a Succession Farm Partnership can avail of an annual income tax credit of €5,000 per annum for up to 5 years split between the farmer and the successor in the partnership. Farmers must firstly form a registered farm partnership with their successor(s), and to be eligible to avail of the income tax credit, they must also complete the Teagasc ‘My Farm My Plan’ business planning booklet and sign a legally binding Succession Agreement.
WORKING GROUP
A working group to develop a specimen Succession Agreement and explanatory booklet was formed by Thomas Curran, Farm Structures Specialist, Teagasc and included: Mr Ben Roche collaborative farming consultant, Diarmaid O’Cathain and Eddie O’Leary (solicitors), James Byrne (accountant); Revenue staff and Department of Agriculture, Food and the Marine staff.
Sean Bell from the Economic Planning & Policy Division of the Department of Agriculture, Food and the Marine, said: “This agreement is very comprehensive while at the same time being clear and concise”.
The specimen agreement will serve as an aid to farmers, successors and their professionals such as solicitors and accountants to create a Succession Agreement that is tailor made to their particular circumstances. Thomas Curran, Teagasc said: “This specimen Succession Agreement and explanatory booklet will provide clarity to farmers and their professional advisors, while also setting the standard in terms of the quality of agreements required by the scheme.”
Both the farmer and the successor will require detailed legal advice and taxation advice from a solicitor and accountant before completing the specimen succession agreement.
The specimen template succession agreement and explanatory booklet can be downloaded in pdf format on the Teagasc website at the following link:https://www.teagasc.ie/rural-economy/farm-management/collaborative-farming/succession-farm-partnerships
