Entitlements

paddysdream

benjydagg wrote: »

I am not giving advice.
But..
If you were to sell those entitlements, at a guess they should sell at 1.5 times. That would be €4,085 x 1.5 less costs i.e. €6,127 minus costs = €5,800
Less CGT - €1400 NET income €4,400

Buy 14 x €600
€600 x 2.2 times (a guess, could be higher closer to 15th May)
Total cost €19,000
Less income from sale €4,400 NET cost €14,600

This should generate €8,000 per year 2014 to 2019 subject to greening, cross compliance etc etc.

Staying as you are should bring in €4,000 yr.

Is it worth it? You decide.

I'm not an adviser, I'm a farmer.

Think you are forgetting a few bits with that advice.

Under the present scheme entitlement value stayed the same for the entire length of the scheme apart from modulation and the financial discipline of the last 2 years.

Under the new system values above the average(256?) will fall each and every year until 2019.Therefore you must factor this into account.

Also after this the feeling is that by 2028(ok a long time away but?) the idea is that a leveling out to at least a national if not european level will occur.
This is what the long term plan seems to be.

Also any entitlements bought now will also be subject to cuts to fund the national reserve,young farmers etc.

An entitlement with a GROSS value today(assume this is what you pay on) of 600 euro gives a NET return at present of 540 euro give or take a few cents

If modulation increases to 12% next year(think thats the plan) then your 600 euro entitlement starts off at 528 in 2015.Now take another 6% off maybe.Now you are at 492.
Then the yearly cuts take place .
Even at a reduced value of less than 500 euro you are still on the higher end of the scale ie almost twice the national average.Therefore can see a lot of cuts at this level.

I believe that a gross value of 600 today will draw on average about 440 per year from 2015 to 2019/2020.

So 14 at 600 costing 14600 net would leave by my reckoning a max of 6200 a year.

All this presupposes that their isnt a cut taken from traded entitlements(is there one at present?) for the national reserve.Even a 5% cut on your gross entitlement would leave the above a very marginal exercise.

Thats just my opinion with lots of speculation on what may or may not happen.A tiny shift one way or the other in the small print of what the minister finally settles on could affect some people a lot .eg major clawback on leased or traded entitlements,severe cuts coming in lower than people expect,stacking/no stacking etc etc

Conmaicne Mara

Piece on entitlements in tomorrows Farming Indo.

AnFeirmeoir

I bought some land a couple of years ago and there are no entitlements on it. I've entitlements on existing land . Do I need to buy entitlements for this land or will I get given them ?. What would you do ?

D-mac

AnFeirmeoir wrote: »

I bought some land a couple of years ago and there are no entitlements on it. I've entitlements on existing land . Do I need to buy entitlements for this land or will I get given them ?. What would you do ?

Have you been entering the maps of the land that hasn't any entitlements in your sfp?

AnFeirmeoir

D-mac wrote: »

Have you been entering the maps of the land that hasn't any entitlements in your sfp?

Yes

benjydagg

paddysdream wrote: »

Think you are forgetting a few bits with that advice.

Under the present scheme entitlement value stayed the same for the entire length of the scheme apart from modulation and the financial discipline of the last 2 years.

Under the new system values above the average(256?) will fall each and every year until 2019.Therefore you must factor this into account.

Also after this the feeling is that by 2028(ok a long time away but?) the idea is that a leveling out to at least a national if not european level will occur.
This is what the long term plan seems to be.

Also any entitlements bought now will also be subject to cuts to fund the national reserve,young farmers etc.

An entitlement with a GROSS value today(assume this is what you pay on) of 600 euro gives a NET return at present of 540 euro give or take a few cents

If modulation increases to 12% next year(think thats the plan) then your 600 euro entitlement starts off at 528 in 2015.Now take another 6% off maybe.Now you are at 492.
Then the yearly cuts take place .
Even at a reduced value of less than 500 euro you are still on the higher end of the scale ie almost twice the national average.Therefore can see a lot of cuts at this level.

I believe that a gross value of 600 today will draw on average about 440 per year from 2015 to 2019/2020.

So 14 at 600 costing 14600 net would leave by my reckoning a max of 6200 a year.

All this presupposes that their isnt a cut taken from traded entitlements(is there one at present?) for the national reserve.Even a 5% cut on your gross entitlement would leave the above a very marginal exercise.

Thats just my opinion with lots of speculation on what may or may not happen.A tiny shift one way or the other in the small print of what the minister finally settles on could affect some people a lot .eg major clawback on leased or traded entitlements,severe cuts coming in lower than people expect,stacking/no stacking etc etc

New entitlements post 2015 can be leased WITHOUT any claw-back.

Today's price has hit a new high. €650/HA making 2.5 times value. These were being traded at 1.8 times last year.

People are realising that entitlements will be a very tradeable commodity.

Better than bull Holsteins.....

benjydagg

AnFeirmeoir wrote: »

I bought some land a couple of years ago and there are no entitlements on it. I've entitlements on existing land . Do I need to buy entitlements for this land or will I get given them ?. What would you do ?

If you can afford it, buy. High or low? You decide. I prefer high.

And I think the Farming Independent agrees.

Farmer Pudsey

benjydagg wrote: »

New entitlements post 2015 can be leased WITHOUT any claw-back.

Today's price has hit a new high. €650/HA making 2.5 times value. These were being traded at 1.8 times last year.

People are realising that entitlements will be a very tradeable commodity.

Better than bull Holsteins.....

It all depends on what price you pay for them and when you buy them

paddysdream

benjydagg wrote: »

New entitlements post 2015 can be leased WITHOUT any claw-back.

Today's price has hit a new high. €650/HA making 2.5 times value. These were being traded at 1.8 times last year.

People are realising that entitlements will be a very tradeable commodity.

Better than bull Holsteins.....

Are you certain?.Thats as regards the leasing without clawback cause agree with you re the black and whites.

knockmulliner

What percentage of value are entitlements being leased with land for at the moment? Will this continue post 2015?

Sami23

benjydagg wrote: »

If you can afford it, buy. High or low? You decide. I prefer high.

And I think the Farming Independent agrees.

Can the purchase of entitlements be used as an expense against income tax and are there any other tax implications involved in trading entitlements up to a higher value i.e CGT etc....?

just do it

Sami23 wrote: »

Can the purchase of entitlements be used as an expense against income tax and are there any other tax implications involved in trading entitlements up to a higher value i.e CGT etc....?

Purchase can't be written off as an expense as they are considered an asset. Subsequent sale is subject to CGT. I don't know how selling lower value and buying higher value would work out. You maybe caught on the double.

Sami23

benjydagg wrote: »

New entitlements post 2015 can be leased WITHOUT any claw-back.

Today's price has hit a new high. €650/HA making 2.5 times value. These were being traded at 1.8 times last year.

People are realising that entitlements will be a very tradeable commodity.

How do you think entitlements are going to be a tradeable commodity after this year if this year (2014) is the year that the payment you claim will be what you receive yearly for the next 6 years based on the lower number of hectares you have in 2013 or 2015 ? i.e the total amount of money you claim this year in SFP will be divided by the lesser no. of hectares you claim on in 2013 or 2015 to give you your new entitlement value or will you still be allowed to trade your new entitlements post 2015 ?

This is how I have interpreted it so if anyone sees it different to me or can put it more simply please explain

D-mac

Just throwing it out there that im in the market to buy entitlements in the region of 200-300 and about 20 of them, id be paying cash. if this suits anyone, pm me. cheers

benjydagg

Sami23 wrote: »

How do you think entitlements are going to be a tradeable commodity after this year if this year (2014) is the year that the payment you claim will be what you receive yearly for the next 6 years based on the lower number of hectares you have in 2013 or 2015 ? i.e the total amount of money you claim this year in SFP will be divided by the lesser no. of hectares you claim on in 2013 or 2015 to give you your new entitlement value or will you still be allowed to trade your new entitlements post 2015 ?

This is how I have interpreted it so if anyone sees it different to me or can put it more simply please explain

My understanding as per the agreement of 3rd October, is that entitlements will be allowed to be leased post 2015 without any land attached, and that they can still be bought and sold.

Until the Minister clarifies the detail, nothing is definite. Peter Young should have some good info (I hope) later this evening in the Journal. :cool:

just do it

benjydagg wrote: »

My understanding as per the agreement of 3rd October, is that entitlements will be allowed to be leased post 2015 without any land attached, and that they can still be bought and sold.

Until the Minister clarifies the detail, nothing is definite. Peter Young should have some good info (I hope) later this evening in the Journal. :cool:

That's the online version I take it?

benjydagg

just do it wrote: »

That's the online version I take it?

Nothing of interest in the Journal. It seems everyone is afraid to give advice until the Minister clarifies things.

just do it

benjydagg wrote: »

Nothing of interest in the Journal. It seems everyone is afraid to give advice until the Minister clarifies things.

Do you know when that's going to happen?

Sami23

benjydagg wrote: »

Nothing of interest in the Journal. It seems everyone is afraid to give advice until the Minister clarifies things.

What are the different scenarios that may happen

moy83

benjydagg wrote: »

Nothing of interest in the Journal. It seems everyone is afraid to give advice until the Minister clarifies things.

Or until they sort out their own first

case04

That it exactly! Tidy up their own loose ends first!

Conmaicne Mara

moy83 wrote: »

Or until they sort out their own first

Wash your mouth out with soap, that'd never happen!









(to us anyway)

just do it

Entitlements might be cheap yet if landlords sell en-mass. Did some back of fag pack sums last night and purchase multiple pretty much negates return on high value entitlements. I feel a spreadsheet coming on (I know, sad, sad, sad :rolleyes:)

benjydagg

just do it wrote: »

Entitlements might be cheap yet if landlords sell en-mass. Did some back of fag pack sums last night and purchase multiple pretty much negates return on high value entitlements. I feel a spreadsheet coming on (I know, sad, sad, sad :rolleyes:)

Not that sad. I'm getting a bit of sun at the moment and to relax?

I do the 3 year cash-flow analysis...

JCB1

I know that the finer details are yet to be published but any input appreciated.
In our case we have 10 hectares without entitlements, for example farming 50 Ha with 40 entitlements at €400/entitlement = €16,000.
Under the new scheme will we qualify for 50 Ha at €400/entitlement = €20,000
Or will it be that the max payment will be €16k but it will apply to 500 Ha ?

Also has anyone heard confirmation that forestry is still 'farmed' land and qualified for SFP ?

JCB1

Just to add... I've been reading all that I can on the new scheme but cant figure out an answer...
I've also spoken to my consultant who didn't know either but will get back to me when he finds out.

benjydagg

JCB1 wrote: »

I know that the finer details are yet to be published but any input appreciated.
In our case we have 10 hectares without entitlements, for example farming 50 Ha with 40 entitlements at €400/entitlement = €16,000.
Under the new scheme will we qualify for 50 Ha at €400/entitlement = €20,000
Or will it be that the max payment will be €16k but it will apply to 500 Ha ?

Also has anyone heard confirmation that forestry is still 'farmed' land and qualified for SFP ?

Commercial grant aided forestry planted post 2009 that previously claimed in 2008 as forage will be eligible still for SFP.

€16k less reductions on 50ha.
You can buy up to 10 units this year if it makes economic sense to you.

Conmaicne Mara

benjydagg wrote: »

Commercial grant aided forestry planted post 2009 that previously claimed in 2008 as forage will be eligible still for SFP.

€16k less reductions on 50ha.
You can buy up to 10 units this year if it makes eceninic sense to you.

Benjy,

You may or may not know the answer to this. There was a grant for native forestry in SAC land. I was advised by a forestry company to wait and see how CAP pans out. Previously they had €515 a hectare plus what ever SFP had been drawn down on that land. Do you know if that is to be continued?

JCB1

benjydagg wrote: »

Commercial grant aided forestry planted post 2009 that previously claimed in 2008 as forage will be eligible still for SFP.

€16k less reductions on 50ha.
You can buy up to 10 units this year if it makes economic sense to you.

Thanks, assuming the same rule would still apply for forestry planted in 2014 ?

Sami23

JCB1 wrote: »

I know that the finer details are yet to be published but any input appreciated.
In our case we have 10 hectares without entitlements, for example farming 50 Ha with 40 entitlements at €400/entitlement = €16,000.
Under the new scheme will we qualify for 50 Ha at €400/entitlement = €20,000
Or will it be that the max payment will be €16k but it will apply to 50 Ha ?

From what I've read it will be the €16,000 on the 50 Ha. which is €320 per Ha.

But until we know for sure it it too risky to go ahead and buy 10 entitlements your short now before we know the full story