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Switch herd number tax implications

  • 24-03-2023 7:53am
    Registered Users Posts: 372 ✭✭

    Father thinking of transferring herd number to me that we are in acres.

    I have a full time job and a small 40 acre farm with around 10 sucklers.

    If I keep the costs of the farm above what we earn - around 12000. This this simply mean I would not be eligible for any tax on it? I would be on the higher tax ban in main job.

    Happy to invest in farm each year and keep it ticking over.

    Apologies if this is a silly question.


  • Registered Users Posts: 8,716 ✭✭✭893bet

    Surely turn over is more than 12k? that sized farm could easily have 12k plus in payments alone? Have you had a proper look at the accounts? Is it 12k net profit per year?

    Part of the issue will be investment in the farm is typically capitalised ….so against tax over 5-15 years rather than that year, which might not suit you, but if you invest you build up the capital allowances over time.

    Sometimes it’s better give 50 percent to the tax man than 100 percent to john Deere was a phrase I heard also though that stuck me. Spending purely to avoid tax is foolish. But if investment is needed it makes sense.

    Another option maybe to pay a small salary to your father (assuming he is only on a state pension that many older farmers are) as he might have a part of his tax free allowance unused. Handy and justifiable way to shelter 5k but the money does need to end up in your fathers bank account. Ned to do a payroll run on Ros and bank transfer every month. It’s not as complicated as it sounds.

    From an accounting POV you do need to show a profit once every 3 ish years to be able to demonstrate a viable business etc to the revenue.

  • Registered Users Posts: 372 ✭✭irishguy19772

    Okay thank you for all the advice. On a general figure, I'd imagine around 8 last year on grants and schemes. Could be around 12 this year with acres factored in. Around 4k on weanling sales.

    So I would imagine very likely little left from 12 last year when factor in supplies, silage, fertiliser, diesel, feed, dosing etc. Etc.

  • Registered Users Posts: 18,104 ✭✭✭✭Bass Reeves

    You be putting in Motoring ( 2/3 of car, diesel, car tax, insurance, maintenance etc), 2/3's of phone and electricity, cat&dog food, what ever tools you buy. You will have your normal running costs silage, ration a bit of tractor diesel and maintenance. As well any farm investment will be deprecated.

    It's easy enough to bury 15-20k

    Slava Ukrainii

  • Registered Users Posts: 8,716 ✭✭✭893bet

    If there is very little left what’s the point? If you are spending all the grants and all the cattle sales on producing the few cattle sales then what’s the point?

  • Registered Users Posts: 3,413 ✭✭✭

    You are right to a certain degree but Revenue need to see your unprofitable enterprise regardless. I think there's a fine for non disclosure and you will be named and shamed. Might not be a good omen when you look for finance in the future from Banks etc.

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  • Registered Users Posts: 8,716 ✭✭✭893bet

    Agree. I am more saying the farming system chosen needs revision!