Messy farm inheritance issue

Chevy RV

roosky wrote: »

Oh she is more than happy to give them sites and let them have the family home which a relatively new home worth probably over 300k....the issue is for example of the 80 acres are valued at 7k an acre that’s €373,333 she would have to pay to inherit her family farm which is obviously not viable !

This doesnt appear to add up.

House worth >€300,000

Land Worth 80 X €7,000 p/a = €560,000


Total Assets €860,000

Where did you get the €373,000 "pay to inherit from"

Even if she was getting it with a 1/3 off for her "share" - how are any other suckler farmers buying land?


CAT Tax advice definietly required!!!!

Chevy RV

Chevy RV wrote: »

This doesnt appear to add up.

House worth >€300,000

Land Worth 80 X €7,000 p/a = €560,000


Total Assets €860,000

Where did you get the €373,000 "pay to inherit from"

Even if she was getting it with a 1/3 off for her "share" - how are any other suckler farmers buying land?


CAT Tax advice definietly required!!!!

She would inherit 1/3 = 186k and have to buy the other 2/3 = 373k.

blackbox

Bentlee Kind Teapot wrote: »

She would inherit 1/3 = 186k and have to buy the other 2/3 = 373k.

If the farm is viable she should be able to make a business case to borrow and buy out the others.
She is getting a third of a farm for free - a good inheritance.

Grueller

blackbox wrote: »

If the farm is viable she should be able to make a business case to borrow and buy out the others.
She is getting a third of a farm for free - a good inheritance.

Obviously not from a farming background and no idea of farm finances

einn32

Donald Trump wrote: »

It's doesn't look like she has forsaken a career to keep the place going. It seems that she gives her parents a dig out in her free time and does the books etc. The parents might be asset rich and cashflow poor. If she can save her parents a chunk on accountants fees every year then a decent person would do that regardless.



I am sure that in the big scheme of things, she "owes" them far more money than her helping out has paid back!


She shouldn't give up her own job though without it being sorted if she has a decent job outside herself.

Just seems mad to me as an adult to work away on the farm in all your spare time and even take holidays for calving with a low possibility of inheriting it outright. I think most people don't mind helping out but she seems to devote all her time to the cause.

Although I know a guy who worked away on the home farm for years and his father only gave it to him on his deathbed.

Hard Knocks

einn32 wrote: »

Just seems mad to me as an adult to work away on the farm in all your spare time and even take holidays for calving with a low possibility of inheriting it outright. I think most people don't mind helping out but she seems to devote all her time to the cause.

But lots of us do / have done it
If you grow up on a farm, always play an active part, it becomes second nature. Same as football

How many plan their Wedding day / holidays around the quiet times.

The “stand in a gap brigade” are good to have on a busy day but you would be wary of leaving the farm in their charge for a few days

skooterblue2

Millionaire only not wrote: »

Farms don’t work that way , it’s not viable to buy them out !
Some small token maybe , but they got there education , they have a job good luck to them !

Give me the same choice, small farm or good education, I will take the education every time. Education gives you freedom, a farm ties you down and 80 acres wouldn't survive to the next generation. I am surprised how it has survived this far.

skooterblue2

einn32 wrote: »

Although I know a guy who worked away on the home farm for years and his father only gave it to him on his deathbed.

We all know the story of the Bachelor farmer who worked with his nephew right up to his deathbed only to leave the farm to the other nephew who just came home from the building in England to retire. Look after your own lot and dont be depending on old people to leave you things in their old age. Nothing causes more fights in families more than drink and wills.

Fools wait for other peoples money, sages go and make their own.

wrangler

einn32 wrote: »

Just seems mad to me as an adult to work away on the farm in all your spare time and even take holidays for calving with a low possibility of inheriting it outright. I think most people don't mind helping out but she seems to devote all her time to the cause.

Although I know a guy who worked away on the home farm for years and his father only gave it to him on his deathbed.

At least he got the farm in the end,,, many don't

skooterblue2

blackbox wrote: »

If the farm is viable she should be able to make a business case to borrow and buy out the others.
She is getting a third of a farm for free - a good inheritance.

Go work on a farm for a year and come back and tell the rest of us about it. You know nothing about farming or business or the older generation.

skooterblue2

wrangler wrote: »

At least he got the farm in the end,,, many don't

What good is a farm when you are 60? the marrow of life has been sucked dry. No woman would marry you on the hope an old man might die and maybe leave you and the taxman the farm!

skooterblue2

Bentlee Kind Teapot wrote: »

She would inherit 1/3 = 186k and have to buy the other 2/3 = 373k.

It just doesnt work that way. You have to find someone to lend you that money. What if the farm has a bad year, what if the EU dont give subsidies? You are competing against cheap beef brought in from South America, Milk brought in from Northern Ireland, Chickens from South America and South east asia.
You may ask were are all these wonderful meats? Well the Meat plants are all (nearly) owned by one man. He dictates the price. he buys the cheap meat holds it for 30 days and it becomes a "product of Europe" or minces it or sprinkles it with breadcrumbs and hey presto, T'is as Orish as St Patty himself (Yes I know St Patrick was Welsh).
You want to compete against that and tell me its an even playing field?

einn32

wrangler wrote: »

At least he got the farm in the end,,, many don't

True but he didn't find out until that time. Could have gone to another brother just as easily. Oul lads!

skooterblue2

skooterblue2 wrote: »

It just doesnt work that way. You have to find someone to lend you that money. What if the farm has a bad year, what if the EU dont give subsidies? You are competing against cheap beef brought in from South America, Milk brought in from Northern Ireland, Chickens from South America and South east asia.
You may ask were are all these wonderful meats? Well the Meat plants are all (nearly) owned by one man. He dictates the price. he buys the cheap meat holds it for 30 days and it becomes a "product of Europe" or minces it or sprinkles it with breadcrumbs and hey presto, T'is as Orish as St Patty himself (Yes I know St Patrick was Welsh).
You want to compete against that and tell me its an even playing field?

Given all of this. How the fooooook is it worth 7k an acre in this calculation?

Millionaire only not

whelan2 wrote: »

I think in most cases the family are just happy if anyone shows an interest. Gender or losing family name doesn't come into it anymore. ( well not around here )

There not all dead yet that think the old way believe u me .but it will be a fine thing when they are .
There is 6 or 7 farms in my locality this generation have had all girls from 2 girls to 4 and wether they like it or not the names will change on there farms. saying that they should be dam glad if anyone of them are willing to take it .

rn

Given the figures being quoted and the circumstances, I can't see why a good solicitor wouldn't devise a decent, tax efficient inheritance for all three while keeping the entire farm intact and giving it to the daughter who has an interest. It wouldn't be equal, but more or less equal after tax is taken out. That's the only figure that matters.

Remember if a farmer gets left a farm, the inheritance tax is relatively tiny. If City slickers inherit it, your looking at 33c on the euro. They'd be forced to sell the land just to pay the tax bill.

Dividing entire holding in three will finish the farm as an entity in that family. Of course there's no accounting for people who won't look for or listen to sound, sensible advice.

doc22

rn wrote: »

Given the figures being quoted and the circumstances, I can't see why a good solicitor wouldn't devise a decent, tax efficient inheritance for all three while keeping the entire farm intact and giving it to the daughter who has an interest. It wouldn't be equal, but more or less equal after tax is taken out. That's the only figure that matters.

Remember if a farmer gets left a farm, the inheritance tax is relatively tiny. If City slickers inherit it, your looking at 33c on the euro. They'd be forced to sell the land just to pay the tax bill.

Dividing entire holding in three will finish the farm as an entity in that family. Of course there's no accounting for people who won't look for or listen to sound, sensible advice.

If the city slicker is the son there wouldn't be a 33% tax bill with exemptions, and even at that if they "farmed" or leased the land and it made a sizable portion of their asset they'd get relief. You don't have to be currently a farmer to claim this.

Reggie.

whelan2 wrote: »

I think in most cases the family are just happy if anyone shows an interest. Gender or losing family name doesn't come into it anymore. ( well not around here )

Big thing around here it seems

whelan2

I'm extremely lucky farm was signed over to me in my twenties. There wasnt really much partnerships going on at that time and the early retirement scheme wouldn't have suited. I am now wondering if I should do similar with my lad or is it a burden on him now to be farming....

curiousinvestor

Reggie. wrote: »

Big thing around here it seems

I said to my mother recently that my middle girl, ( I've a young family 2 girls and a boy) was showing the most Interest ( she never leaves my side and is full of energy, loves d cattle as much as being on tractors) , and refers to the farm as " our" ( daddy and hers) farm, and if she keeps it up it,ll be hers.
My mom was a bit surprised.
I says, There is absolutely ZERO chance I'm dividing my land , that ive broken myself picking stones, worked 2 jobs, built sheds myself, ( worked nights for years)to pay for it. If I think someone is going to piss it away, i.ll sell it myself.
The kids will be provided for. But no way is some city slicker going to get my farm, sell it to fund holidays and big cars.
My opinion, A farm is a vocation, and a great opportunity for a young family, not an entitlement to a sibling just cause they think so.
I had serious words with a sister once , who came home like the prodigal son, demanding her share. She got no quarter from anyone, twas the only time my father stayed quite on a topic.
My view, and of course horses for courses, and who knows what the future holds.

doc22

whelan2 wrote: »

I'm extremely lucky farm was signed over to me in my twenties. There wasnt really much partnerships going on at that time and the early retirement scheme wouldn't have suited. I am now wondering if I should do similar with my lad or is it a burden on him now to be farming....

In the past farm transfer were done to claim the Pension, now with self employed prsi you can claim the full pension without means testing.

The vast majority of farms aren't being transferred, and unless you have a big profitable farm transfers aren't attractive as the receiver will more than likely need of farm work and hence taxed (perhaps@ 40%),prsi, USC on any profit. While those of pension age will have no PRSI and different tax and USC rates depending on circumstances.

skooterblue2

skooterblue2 wrote: »

It just doesnt work that way. You have to find someone to lend you that money. What if the farm has a bad year, what if the EU dont give subsidies? You are competing against cheap beef brought in from South America, Milk brought in from Northern Ireland, Chickens from South America and South east asia.
You may ask were are all these wonderful meats? Well the Meat plants are all (nearly) owned by one man. He dictates the price. he buys the cheap meat holds it for 30 days and it becomes a "product of Europe" or minces it or sprinkles it with breadcrumbs and hey presto, T'is as Orish as St Patty himself (Yes I know St Patrick was Welsh).
You want to compete against that and tell me its an even playing field?

I am not saying she should have to buy out her brothers I was simply explaining to another poster where the figures come from.

The farm should be left (bar a site each say) to the person who wants to run it this is how its done in any case where people have their head screwed on. Splitting up a farm makes it unsustainable, having to buy out family makes it unsustainable.

Topgear on Dave wrote: »

Given all of this. How the fooooook is it worth 7k an acre in this calculation?

7k would be the lower end, we paid more per acre recently for land that's just about ok. It will take a very long time to pay for itself but land rarely comes for sale around us and it was an idea location for us so we wouldn't let it go to someone else. The price of land has little to do with how profitable it would be to buy it.

blackbox

Grueller wrote: »

Obviously not from a farming background and no idea of farm finances

Correct - I am not from a farming background, but will you allow that perhaps that might give me a more objective view.

Unless there are truly exceptional circumstances (e.g. criminality) I would treat my adult children equally. If I have an asset - property, a business, a farm etc. I would consider it only fair to divide it between them. If one child has been working in the business I would have been paying him or her an appropriate wage. At any stage they would have been free to look for a better job elsewhere.

Each child has a choice (they are adults!) on what to do with his or her inheritance. If they think it is not viable as a source of income they can sell it and work at something else. If they can afford to buy it from the others for a hobby, fair dues to them.

I see complaints above that you can't make money out of farming. I think these actually strengthen my argument. Land is hugely over-valued for the returns that can be achieved from it.

The J Stands for Jay

Bentlee Kind Teapot wrote: »

The price of land has little to do with how profitable it would be to buy it.

It's a pretty essential factor in the calculation of profitability of an investment.

Keep Sluicing

whelan2 wrote: »

I'm extremely lucky farm was signed over to me in my twenties. There wasnt really much partnerships going on at that time and the early retirement scheme wouldn't have suited. I am now wondering if I should do similar with my lad or is it a burden on him now to be farming....

I would think between 28 and 32 is a good age to be handing it over. It allows the recepiant time to be sure it is something they want for the rest of their life, while allowing them plenty of their life to put their own stamp on the place.

Bass Reeves

The problem is too many inherit land that do not have a commercial focus. This is just another case. I often hear it's my land type. Around me are 6 farms. We all have much the same land everyone else ''inherited'' there land.

At the front of me is a 250 acre+ land bank owner has 600+ acres just set stocks and manages away. Every breed and type of animal except a bull.
On one side is a lad with 80+ acres some of it rented, he very interested in horses, over the last ten years he had a few suckler's, now he has a few fancy heifers front of house stock on a store to store system. He might get to a few friesian's at some stage if he looks acrosss the ditch rather than listening to his specialist advisors( not Teagasc)

At the back a 50 acre farm sites sold off it over the last 20-30 years, a dozen suckler cows and a few calves.

At the other side is a former dairy farm now in drystock, heading towards suckler's.

At two corners two other farms hit me one is a 25 acres rented and at the other side is an out farm to an outfit where two sons and a father farm together, they have sheep, finish cattle and they have a few chicken houses as well.

There is often too many excuses. Yes there is some poorer type land that is 6-7 months winter. However this farm sounds like it was/is commercial. It seems to have been capable of maintaining a family maybe up until now.

There is a lat of assumptions about her two.older brothers. It's assumed they have good jobs and moved away if there own volitional. However you have to remember that there careers seemed to be Dublin based. They may have families as they're slightly older than there sister.

Yes she has helped over the years and this has to be recognised. However the assumption that her parents have no rights to see after there other children is not dealing with reality.

The assumption that farms are sacrosanct and must be given debt free to the inheritor leads to a lot if the ''it will not work here'' and ''I do not want scrawny dairy cattle''

Most farms are commercial but lads are unwilling to change or adjust there systems. The cow that slips a calf is given a second chance... to repeat the act. Old Molly has had 15 calves she have 16...17..18 or goes down at the next calving and both her and the calf go out in the knacker lorry.

Some here consider this farm incapable of managing a 350k debt I believe it is. But even if not is it not capable of giving 100k to each of her brothers now and that the balance given when her parents house is sold.

If you had to pay for it you be.more focused on farming it with farm profitability in your mind all the time

Electric Sheep

Keep Sluicing wrote: »

I would think between 28 and 32 is a good age to be handing it over. It allows the recepiant time to be sure it is something they want for the rest of their life, while allowing them plenty of their life to put their own stamp on the place.

You don't see the age of the parent as relevant, only that of the recipient?

Keep Sluicing

I was quiet lucky here when the parents went to hand over the place. My 3 older siblings had not any interest in farming and had made their lives in other industries. I was also college educated like them, but I always help out as much as I can.
Each sibling got a site on the farm, plus a sum of money. To start them on their way in life. My dad was a progressive dairy farmer and my mother worked in a government job all her life. If any of my siblings didn't take up the option of a site, I handed over approx half the value of the site to them.
I got the farm, minus about 10 acres.

Keep Sluicing

Electric Sheep wrote: »

You don't see the age of the parent as relevant, only that of the recipient?

It is... but we are talking "in general" here. And there are a million caveats to my musings. Might your own opinion be open to scrutiny?

Good loser

Good loser wrote: »

Most unfair of the father (in particular) to suggest the 3 parts equal division.

It's the mother suggesting this.