Farm Partnership & Self Employed - Advice Needed

19driver83

Hi,

Im looking for some advice before I make contact with an accoutant or farm adviser.

My current situation is as follows;
My dad is a dairy farmer nearly 70 years old with 75 acres + renting 15 acres for many years. Currently milking 55 cows, milking 80 at the peak.

My situation. Im a self employed engineer and I operate as a ltd company. I have a green cert.

I would like to make improvements on the farm, housing, roadway etc. but there is no way I am going to put up my personal money without seeing something back.

Currently I see great potential for me to be able to claim back PAYE against farm losses. Having a ltd. company would allow me to vary my salary to match farm losses.

Currently I am in employment and would not see myself going into dariy farming but I wouldnt rule it out either in the future. In all likelihood the cows will be replaced with dry stock in the next year or two.

Can someone explain to me the ins and outs of a farm partnership, positives, negatives, tax implications, etc.

Or if a farm partnership is the best way forward, are there any other avenues open to me?

farmerjack

My first bit of advice for you is if you want to make a few quid off the farm and get a return for any investment you put in, stick with the dairy cows, nothing in drystock at that scale

6480

i would try and stay at the dairying , if you have any hope of geting a steady income it would be from milking cows , if a dairy farm is set up right it can be very easy to manage

nashmach

Biggest issue with partnership for you will be the limit on off farm income.

jfh

you might stay with the dairy, but it's something you'd want a love for, think there's a lot of lads in for a land in the next few years, but if your busy now, then that's a good sign that you must be a decent engineer so you could combine it with the drystock, between both you'd have a better quality of life than soley dairying.
sorry have nothing to add on the partnership question.

LivInt20

19driver83 wrote: »

Hi,

Im looking for some advice before I make contact with an accoutant or farm adviser.

My current situation is as follows;
My dad is a dairy farmer nearly 70 years old with 75 acres + renting 15 acres for many years. Currently milking 55 cows, milking 80 at the peak.

My situation. Im a self employed engineer and I operate as a ltd company. I have a green cert.

I would like to make improvements on the farm, housing, roadway etc. but there is no way I am going to put up my personal money without seeing something back.

Currently I see great potential for me to be able to claim back PAYE against farm losses. Having a ltd. company would allow me to vary my salary to match farm losses.

Currently I am in employment and would not see myself going into dariy farming but I wouldnt rule it out either in the future. In all likelihood the cows will be replaced with dry stock in the next year or two.

Can someone explain to me the ins and outs of a farm partnership, positives, negatives, tax implications, etc.

Or if a farm partnership is the best way forward, are there any other avenues open to me?

You will only be able to use losses for three years against PAYE income, otherwise it is considered hobby farming and losses are not allowed against PAYE income.

Timmaay

LivInt20 wrote: »

You will only be able to use losses for three years against PAYE income, otherwise it is considered hobby farming and losses are not allowed against PAYE income.

In fairness for you just to consider a 90acre dairyfarm a method of reducing yourown taxbill is abit insulting to the rest of us dairyfarmers ha, the top lads are supposedly achieving a profit of 1000e/acre from dairyfarming. Its perfectly capable of making a comfortable profit itself, you don't need to be tided down to it, hire in full time labour to run alot of the show.

lakill Farm

Presuming your born 1983? like myself your29. I would really say you look at getting the farm transferred to you before your 35.

And at 55 - 65 cows i would look at investing in a robot milking machine.

That way your farming part time around your Ltd company structure as an engineer.

S381 - the write off of farming loss against PAYE income can only happen 4 years in a row. More planning needed. New sheds, roadways etc are capital improvements not day to day , thus they effect the Balance sheet not the P& L except for interest payments.

19driver83

nashmach wrote: »

Biggest issue with partnership for you will be the limit on off farm income.

What's the limit?