Messy farm inheritance issue

MIKEKC

Maia Great Railing wrote: »

She would have to pay over 200k to inherit the farm if she received the entire estate, and that would be tax given to the state. Or over 100k if receiving the farm without the house. She would penalised if she didn't pay that in good time too. Given that she has nothing to her name and the farm is not profitable, the only way she could afford that is by making a quick sale of some or all of the land. So the end result would be the same, only difference would be whether the two sons are shafted for not keeping it real or something.

Where did you get that information from?

Bass Reeves

First of all she is lucky her parents have put there feeling on what they think should happen out in the open. I am presuming that all children have gone through or the option of going through college and have decent jobs.

The land is being valued at 7K/acre so it must be better than forestry type land. Just on income derived from such land what is it capable of delivering in real terms. I presume that the BPS is at least 300/HA giving a basic payment of 9K+ along with ANC of 3K+, GLAS is capable of generating 4K+ on such a land area along with suckler and other payments payments (assuming 30+cows) 4Kish giving a total payments of 20-22K I imagine. Even a suckler system should be capable of generating another 6-8K in margin. The farm I presume is set up, stock maybe to the value of 60-80K along with Machinery and other farming equipment of 30-50K+. This gives a real value in the region of 550-600K

I presume that she has a profession type job as it is unlikely she is working away from home in a non professional type employment. Her parents have educated all the children and now have taken the decision regarding the distribution of there wealth. She has to decide if it is viable to borrow 3-400K and pay it back and under what conditions she is willing to consider such a plan. It is obiviously not viable unless she gets all the land, stock and payments signed over to her and may not be viable even then. However she has a few card in her deck.

She has to sit down with both parents and discuss what is viable for her. It is now obivious that some considerations have to be given to her brothers. Are her parents happy to sell the farm at present. If she buys it are they happy that no more income will be available to them from the farm. I assume that at least one of the parents is reaching pension age. She has to make it clear that it is not viable maybe even for her to borrow that sum at present and if she takes over the farm it will limit her career and earning income outside the farm. In such a situation she should indicate that it would not be viable for her to take over the farm.

I imagine that part of the parents problems is that nowadays children find it much harder to buy houses and set themselves up compared to 20+ years ago. Is it viable for her to make a contribution now of 100K to be divided between the two other siblings and that her parents house and any remaining money will be there's as well. Maybe make the point that if the farm is not an option for her that she will have to pursue her present career to its max as well as looking at travelling options. This means that she will never return to live locally. She also has the fact that it is unlikely her parents can continue farming without her or her siblings input and if the older boys are uninterested in farming them the present situation is untenable

s7ryf3925pivug

MIKEKC wrote: »

Where did you get that information from?

You pay high tax on inheritances or gifts that exceed a lifetime threshold. In the case of parents the threshold is a bit over 300k last I looked.

However someone mentioned that it's not applicable on the farm because farms are valued at 10% of their market value for this purpose. So you can inherit a 3 million euro farm and pay zero tax apparently.

beauf

GrasstoMilk wrote: »

You'd be surprised. My father bought the farm inc the debt it had incured, looked after his mother till the day she died and his sister got everything, even the things his father had left him. She only appeared once every so often for Sunday tea

GrasstoMilk wrote: »

A ****ty solicitor on my fathers side and a even ****tier judge. My father sold that farm before his mother died and she changed the will out of spite

Your story doesn't add up on the facts given thus far. He bought and sold the farm before the mother died and after that she left everything (what is everything?) to the sister.

Mortelaro

Maia Great Railing wrote: »

You pay high tax on inheritances or gifts that exceed a lifetime threshold. In the case of parents the threshold is a bit over 300k last I looked.

However someone mentioned that it's not applicable on the farm because farms are valued at 10% of their market value for this purpose. So you can inherit a 3 million euro farm and pay zero tax apparently.

It's a while since I did the exercises but I thought Agricultural relief was only 50%

But at 7k an acre that would bring it in under the tax threshold

If the parents are only in their 50s and one of them driving an oil lorry or something to make ends meet,the daughter needs to cop on and forget about this concentrating on a more financially rewarding life as opposed to a prison farm with no time for a life
If the daughter is only 20 then this will be hard gotten through to her until some maturity is gained
My advice would be to skip a generation here maybe
Favourite nephew or niece status is as good as a son or daughter,but give sites to the 2 lads or whatever way it works out
I'm never going to advise slavedom and being a vassal to uncontrolled processors unless the farm is big enough to at least pretend (sometimes) you're not a slave

Donnielighto

Mortelaro wrote: »

It's a while since I did the exercises but I thought Agricultural relief was only 50%

But at 7k an acre that would bring it in under the tax threshold

If the parents are only in their 50s and one of them driving an oil lorry or something to make ends meet,the daughter needs to cop on and forget about this concentrating on a more financially rewarding life as opposed to a prison farm with no time for a life
If the daughter is only 20 then this will be hard gotten through to her until some maturity is gained
My advice would be to skip a generation here maybe
Favourite nephew or niece status is as good as a son or daughter,but give sites to the 2 lads or whatever way it works out
I'm never going to advise slavedom and being a vassal to uncontrolled processors unless the farm is big enough to at least pretend (sometimes) you're not a slave

Farming is somewhat of a vocation for a lot of people. My bro works as an engineer but would full time farm if it was viable, this is on about 170 acres and the return isn't there.

The J Stands for Jay

jackboy wrote: »

Farms are different to other businesses. A split farm often means no farm.

Good luck splitting the family shop or pub.

Professor Genius

Donald Trump wrote: »

Lets kill two birds with one stone here. If she's hot, sign her up to boards and we'll get her paired off with a bachelor farmer with even more land and better land in a better location.








Half tongue-in-cheek...half not

A lot of women who work the land tend to be......how can I put it delicately?


Sturdy I suppose might be the best way to put it diplomatically

beauf

Donnielighto wrote: »

Respect the farm would be about keeping the landholding together. The smaller the holding the less viable it becomes. Good chance the farm has been in family hands for 100 years or so if not more at this point

So this could be the same as large guest house inherited by two siblings. One should give up their claim on the inheritance to facilitate the other sibling keeping the business going. As neither can afford to buy each other out.

The only reason a farm is treated differently, is to encourage younger persons to become engaged in farming.

Does the daughter have any assets, is she considered an "Active farmer"?

https://www.irishexaminer.com/farming/news/karen-walshinheritance-tax-relief-open-for-active-farmers-422279.html

https://www.independent.ie/business/farming/agri-business/finance/the-limits-of-agricultural-relief-how-not-to-get-hit-with-a-massive-tax-bill-when-inheriting-land-36906136.html

http://mmcloughlinsolicitors.com/latest-news/how-to-qualify-for-agricultural-relief-in-ireland

Donald Trump

Professor Genius wrote: »

A lot of women who work the land tend to be......how can I put it delicately?


Sturdy I suppose might be the best way to put it diplomatically

The scrawny wans wouldn't be too much good to ya with a 4 grain dung-fork though

talk of prison and slavery is some way to discuss the division of a large family asset

bit of perspective be no harm

Donald Trump

Maia Great Railing wrote: »

You pay high tax on inheritances or gifts that exceed a lifetime threshold. In the case of parents the threshold is a bit over 300k last I looked.

However someone mentioned that it's not applicable on the farm because farms are valued at 10% of their market value for this purpose. So you can inherit a 3 million euro farm and pay zero tax apparently.

similar relief is available for businesses. It's actually less restrictive for businesses.

Bass Reeves

Agriculture relief has certain conditions. I think other than the family home you may not have other non agri assets that will when added to the farm will make 25% of total assets

However even without agriculture relief the potential inheritance tax on the land would be be negleible after valuation by a good auctioneer

Bass Reeves

Bass Reeves wrote: »

Agriculture relief has certain conditions. I think other than the family home you may not have other non agri assets that will when added to the farm will make 25% of total assets

There’s an example and details here. https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/agricultural-relief/what-are-the-conditions-for-agricultural-relief.aspx

Buford T. Justice XIX

littlemisshobo wrote: »

I'm sure I am. But I'm also flabbergasted by the vulgarity of expecting the family farm to go to a possibly 20 Yr old still in college. In what way has she contributed to that business to finance her older siblings to go to college? One side is all we get and she sounds spoiled af.

That's a rather interesting adjective to be using in this conversation.

I was in much the same situation as this girl, all my siblings were told they were entitled to an education, whatever education they wanted from the farm and that was our entitlement, no sites, money or anything else was going to come our way.

Only one was going to get the farm but they would also be facilitating the others educations while working on the farm and getting their own education.

I spent 7 years in college and coming home most weekends, studying on the train and at home in the evenings and Sundays but also doing the paperwork and organising the following weeks work while setting up the work to be minimised for my parents while I was absent at college. All breaks were spent at home working while my siblings were off on holidays and weekends away, paid for in part by my work. But that was the deal and it worked out for me and for them and all were happy with the situation.

I continued doing this for a number of years working afterwards while the last of my siblings were educated to their fullest degree. When my parents got ill and couldn't work, it was me who left a good job and returned to work full time here.

Yet, despite everyone knowing the deal from an early stage, one of my inlaws had a conniption when they discovered they weren't getting a jot from my parents estate bar some heirlooms they had expressed an interest in. So despite my work educating their spouse and providing for their future by working while their spouse was enjoying themselves, they still felt an entitlement to gain a significant share of my parents estate.

Vulgarity, you said?

Indeed.

We still welcome them into our house when they call and still smile while they throw barbs and digs at our work on 'their' share of the farm but fate hasn't been kind to them and that's fine by me, they made their bed and will have the rest of their life to lie in it.

So the woman in question is quite right to expect a greater share of the estate than her brothers, imo, she's putting in the hours at home along with working as well and deserves a greater share of the proceedings.

Just as her brothers would if they had returned and spent time and energy on the farm.

Just as they chose not to.

Entitlement indeed.

Panch18

GrasstoMilk wrote: »

You'd be surprised. My father bought the farm inc the debt it had incured, looked after his mother till the day she died and his sister got everything, even the things his father had left him. She only appeared once every so often for Sunday tea

People have no clue of the injustices that happen when it comes to land transfers.

Panch18

Buford T. Justice VI wrote: »

That's a rather interesting adjective to be using in this conversation.

I was in much the same situation as this girl, all my siblings were told they were entitled to an education, whatever education they wanted from the farm and that was our entitlement, no sites, money or anything else was going to come our way.

Only one was going to get the farm but they would also be facilitating the others educations while working on the farm and getting their own education.

I spent 7 years in college and coming home most weekends, studying on the train and at home in the evenings and Sundays but also doing the paperwork and organising the following weeks work while setting up the work to be minimised for my parents while I was absent at college. All breaks were spent at home working while my siblings were off on holidays and weekends away, paid for in part by my work. But that was the deal and it worked out for me and for them and all were happy with the situation.

I continued doing this for a number of years working afterwards while the last of my siblings were educated to their fullest degree. When my parents got ill and couldn't work, it was me who left a good job and returned to work full time here.

Yet, despite everyone knowing the deal from an early stage, one of my inlaws had a conniption when they discovered they weren't getting a jot from my parents estate bar some heirlooms they had expressed an interest in. So despite my work educating their spouse and providing for their future by working while their spouse was enjoying themselves, they still felt an entitlement to gain a significant share of my parents estate.

Vulgarity, you said?

Indeed.

We still welcome them into our house when they call and still smile while they throw barbs and digs at our work on 'their' share of the farm but fate hasn't been kind to them and that's fine by me, they made their bed and will have the rest of their life to lie in it.

So the woman in question is quite right to expect a greater share of the estate than her brothers, imo, she's putting in the hours at home along with working as well and deserves a greater share of the proceedings.

Just as her brothers would if they had returned and spent time and energy on the farm.

Just as they chose not to.

Entitlement indeed.

In a nutshell Buford

And that’s exactly why I said in my first post on this thread that wives and girlfriends shouldn’t be in the family meeting. It’s amazing how people marry in and think they have a right to dictate, on something they never contributed to

whelan2

Panch18 wrote: »

In a nutshell Buford

And that’s exactly why I said in my first post on this thread that wives and girlfriends shouldn’t be in the family meeting. It’s amazing how people marry in and think they have a right to dictate, on something they never contributed to

Ha, not talking to my brother in law at the minute. My parent's have taken the line if the 7 of us -them and their 5 kids- are solid forget the add ons

Treppen

As someone mentioned earlier... The cat is out of the bag. So for now I would assume there's going to be no wills rewritten.

Op should skip forward and ask themselves what happens when all is done and dusted and each has their 1/3?

Maybe OP should be prepaired to do nothing subsequently... And let debts begin to accrue. Highly unlikely OP will want to continue working for little return.

The 2 brothers might realise their inheritance is worth little, especially if there's mention of equal share =equal share of debt burden.

Then either

1. sell off.
2. outside management
3. Buyout

is logical conclusion, no matter what she does now.

If the OP wants to save herself hassle and be in an equal 'laissez faire' position that her brothers are in, then put more effort into alternative income and give her parents ample notice that she will be too busy to do the books. Then at least it will be an equal split.

Becks610

This is by far from the worst messy situation in farms. The girl needs to talk to her parents and see what happens- if nothing changes then she needs to not come home.

It would be worse if more than 1 expressed an interest and there wasn’t enough to support 2 families or if 1 person if just chosen with no real reason why which happens a lot and this is where resentment comes into it as everyone was not on an equal playing field from the start.

johnnyfruitcake

Donnielighto wrote:

Farming is somewhat of a vocation for a lot of people. My bro works as an engineer but would full time farm if it was viable, this is on about 170 acres and the return isn't there.

Is this true? Can people not make a return on 170 acres?

What sort of return would be average?

He's definitely not milking anyway.

patsy_mccabe

This thread is hilarious. The number of people posting here for first time on F&F is very obvious. We're up to 10 tabs already and it's only open a few hours.
I wonder will the thread on calves coughing get as much attention. Couldn't figure why and then realised is like the OP's problem.........where there's easy money, everyone has an opinion.

whelan2

patsy_mccabe wrote: »

This thread is hilarious. The number of people posting on here that have posted for the first time is very obvious. We're up to 10 tabs and it's only open a few hours.
I wonder will teh thread on calves coughing get as much attention.

Tis a bank holiday, what else would ya be at.

Mac Taylor

It’s funny the amount of posters who don’t get the asset rich cash poor nature of farming or the Irish relationship with land, the value of land in an area has absolutely nothing to do with commercial reality in most cases......

There are a number of farms that have not sold near me due to either not getting a bid or not meeting reserve.

For a lot of farmers they cannot earn a living from farming and consequently work full time and farm part time, when people hear this the usual reply is sell up but depending on the area who will buy?

Who2

whelan2 wrote: »

Tis a bank holiday, what else would ya be at.

I’m not long in, have the non farming folk sorted the problem yet?

kk.man

Maia Great Railing wrote: »

You pay high tax on inheritances or gifts that exceed a lifetime threshold. In the case of parents the threshold is a bit over 300k last I looked.

However someone mentioned that it's not applicable on the farm because farms are valued at 10% of their market value for this purpose. So you can inherit a 3 million euro farm and pay zero tax apparently.

I would not say you are right on either point.

Lime Tree Farm

Who2 wrote: »

I’m not long in, have the non farming folk sorted the problem yet?

Sure they have, sell, sell, sell

alps

When it comes to passing on farm assets and indeed many other business assets, please realise that

FAIR does not mean EQUAL

august12

jackboy wrote: »

If that is advice from a good solicitor I would hate to see advice from a bad one.

I second that.

mf240

If one child Is interested in the farm then they should get it. If all three had no interest then it would be logical to devide it.

A farm that size will just about be sustainable and probably part time at that. If she was to try find 2/3 of the market value of the farm to give to her brothers she'd be better off walking away.