Leasing Family farm

the man from athlone

hi folks. Its my first time posting but i read on lots and find the information useful. Now its time for my own query.

Ive been running the family farm for a few years but not officially. Id like to take over, and it seems a lease is the best option for family reasons.

Its small enough and all drystock, nothing major but works ok along with fulltime work, no borrowings at all, enough machinery for what we need and old but serviceable buildings, land is a mix of dry and boggy but works ok.

I'm thinking of leasing the whole thing to have it under my name but have a few questions..
the lease agreement and payment is fine, im ok with that.
the herd number - do i get my own or can the existing one be transferred into my name?
Payments - SFP & DAA, currently paid to the mother, if I lease, can these be transferred to be paid to me or how does that work?
Currently no bookeeping being done which is a worry - if i lease do i just start at the lease date and not worry about previous years?

Ive no green cert done, and don't see me doing it through commitments.

Any other advice would be great.. go easy !

Patrickheg

Consult an accountant before signing anything. Depending on you and your family's circumstances it should be a tax effective to sign a long lease where land owner once they satisfy certain in conditions can take the rent tax free(think whether this is something you want to do as there may be a clawback for the land owner if you break the lease before the tax relief timeframe is up)

mf240

Patrickheg wrote: »

Consult an accountant before signing anything. Depending on you and your family's circumstances it should be a tax effective to sign a long lease where land owner once they satisfy certain in conditions can take the rent tax free(think whether this is something you want to do as there may be a clawback for the land owner if you break the lease before the tax relief timeframe is up)

You cant avail of this relief when leasing to a family member.

lakill Farm

I know a client is leasing 42 acres of good land for €100 for the year

I asked was there another 42 to lease for me. Great land in co meath.

bbam

I'm sure lark could clarify. I think the accounts can just start with the lease.

Wigster

I would say you would need to be qualified i.e. 180 hour certificate or equivalent if you we're to receipt the Sfp and Das.

lakill Farm

bbam wrote: »

I'm sure lark could clarify. I think the accounts can just start with the lease.

you have to register to be a sole trader (your agent will look after this - for free normally)

aneala

In the middle of doing the same here.
You need ag qualification to get herd. no and claim sfp and daa. Other than that the revenue don't care how much you know about farming just start accounts from when you start. With off farm job you can invest and claim back a % of the losses from your PAYE.

As has been said you should get an accountant.

lakill Farm

aneala wrote: »

In the middle of doing the same here.
You need ag qualification to get herd. no and claim sfp and daa. Other than that the revenue don't care how much you know about farming just start accounts from when you start. With off farm job you can invest and claim back a % of the losses from your PAYE.

As has been said you should get an accountant.

you don't need any agri qualification to get herd no or sfp

but you are correct about offsetting Schedule 1/11 losses against Schedule E income

or farming losses against Paye

Username John

lakill Farm wrote: »

I know a client is leasing 42 acres of good land for €100 for the year

I asked was there another 42 to lease for me. Great land in co meath.

I thought you couldn't do this, as there could be a case where the revenue would view the difference in payment for the lease (100euro in your case) and the proper value (lets say 42 x 100euro) of the land lease as a 'gift' (so 4100euro / year in this case)

Is this right?

Also - I leased the farm from a relative previously, who was in receipt of the OAP. He didn't want any money for it, but due to the above, I drew up a lease which had a reasonable value, but the lease had some term like "if demanded" in it. Which somehow got around the fact I wasn't paying for it, and so didn't affect his pension (he was in agreement with this I should add, I wasn't conning the poor man, honestly)
It had to be a proper lease, as I was in reps, and so I had to have proof that a proper lease was in place... So maybe that changes things... Not sure...

the man from athlone

Thanks for the comments folks.. What is the process of transferring the herd number and payments into my name after the lease is drawn up?

Rho b

OP, please ensure that you get independent legal advise. Do not automatically sign a lease agreement that your mothers solicitor has drawn up.
I have seen two families torn apart due to misconceptions on both sides in similar situations and in both cases it was many years after the son/daughter signed the lease agreement.
Also, if you have any siblings make sure that they are aware of any arrangement prior to you signing any agreement with your mother.

KCTK

Username John wrote: »

I thought you couldn't do this, as there could be a case where the revenue would view the difference in payment for the lease (100euro in your case) and the proper value (lets say 42 x 100euro) of the land lease as a 'gift' (so 4100euro / year in this case)

Is this right? ...

You are correct, the inferred value would be seen as a gift and go to reduce your CAT threshold for the category the person leasing you the land falls in to, when threshold gone you would be liable for cat at (currently 33%) on future gifts or inferred gifts from this category.

As the saying goes sometimes the thing (proper tax advice here) that costs the most at d start works out d cheapest in d long run...

lakill Farm

KCTK wrote: »

You are correct, the inferred value would be seen as a gift and go to reduce your CAT threshold for the category the person leasing you the land falls in to, when threshold gone you would be liable for cat at (currently 33%) on future gifts or inferred gifts from this category.

As the saying goes sometimes the thing (proper tax advice here) that costs the most at d start works out d cheapest in d long run...

I agree but it was signed up before i came on board as agent and its a 5 year lease at which time the farm is been transferred to him. Was all of a sudden it happened after his father died.

KCTK

lakill Farm wrote: »

I agree but it was signed up before i came on board as agent and its a 5 year lease at which time the farm is been transferred to him. Was all of a sudden it happened after his father died.

Of course after d event the case could be made to revenue that the land was covered in briars and bushes, needed draining, reseeding etc when he leased it and part of rent was agreement to fix the farm up, revenue would have a job to disprove this.....

lakill Farm

KCTK wrote: »

Of course after d event the case could be made to revenue that the land was covered in briars and bushes, needed draining, reseeding etc when he leased it and part of rent was agreement to fix the farm up, revenue would have a job to disprove this.....

He is actually putting up a crush and refencing it and reseeding it.

KCTK

lakill Farm wrote: »

He is actually putting up a crush and refencing it and reseeding it.

Sorted

lakill Farm

KCTK wrote: »

Sorted

and i told him to take b4 and after pictures

KCTK

lakill Farm wrote: »

and i told him to take b4 and after pictures

all bases covered!!

the man from athlone

the man from athlone wrote: »

Thanks for the comments folks.. What is the process of transferring the herd number and payments into my name after the lease is drawn up?

Anyone got anything on this??

Username John

the man from athlone wrote: »

Anyone got anything on this??

Hello,
I did something similar as you a good few years ago.

For Herd number - is this the form you need?

For SFP - I think its this form (I guess you will need one for 2014)

A call to your local DVO would be best tho, to confirm... like I say, been a while since I did it...