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Stocking loan credit Union

  • 27-04-2022 9:08am
    #1
    Registered Users Posts: 1,013 ✭✭✭


    just Wondering do many people get stocking loans from the credit Union, been getting one for years from the bank but I might try the credit union this year, I would like to hear people’s opinions



Comments

  • Registered Users Posts: 70 ✭✭somofagun


    Was thinking about doing the same thing, I must call in with them to see what their terms are. Bank wont increase mine anymore without land secured against it which I would be reluctant to do.



  • Registered Users Posts: 23,198 ✭✭✭✭mickdw


    I've never seen a good borrowing rate at a credit union.



  • Registered Users Posts: 70 ✭✭somofagun


    True but they might lend me more unsecured which would mean more moo moo's



  • Registered Users Posts: 2,421 ✭✭✭J.O. Farmer


    So you lose even more money and pay more for the privilege or at least I would



  • Registered Users Posts: 1,181 ✭✭✭ruwithme


    Just out of interest, is this to purchase pedigree heifers/premium stock for breeding off? Can't fathom borrowing money & paying interest to buy dry cattle for beef to slaughter.



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  • Registered Users Posts: 2,111 ✭✭✭DBK1


    Something I’ve never done and can’t understand lads doing either. If you’ve to borrow money for beef stock you’re better off without the stock. The small few pound you might make on them will be gone to the bank to cover the interest.



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    Used to purchase them with my own money but the accountant said a few years ago that I would be better to get a stocking loan and put the interest in against my tax rather than tieing up my own money



  • Registered Users Posts: 1,379 ✭✭✭epfff


    Now you have me interested.

    Can I be so bold to ask where you are investing your own money to get a worth while return of over 6/7% that credit union will charge you on stocking loan?



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    I don’t do anything with the money,but now you have me thinking

    I usually get it for 9 months, I usually sell my cattle early September and then purchase in October but I don’t apply till mid November for my stocking loan, as I said the interest I pay on this goes against my tax, would you recommend something different?i also work full time as well



  • Registered Users Posts: 1,379 ✭✭✭epfff


    So you have your own money sitting on deposit a around 0% giving yo a return of 0.

    You borrow at 6% and (assume you higher rate tax) get to write off half.

    From my calculations it is now costing you an uncessary 3%ish. So you cost yourself 3% of the value of your stock to spite/deny the tax man a few euro.

    Heres a new plan for you.

    Write a cheque to me for 6% of the value of your stock each year use your own money to buy the stock and you won't have to go to the bother of filling out any of the application forms or drawing down the loan with the same tax write off.

    Or really get the tax man write a cheque for the total of your profits to me each year and you won't have to give anything to the bold tax man.

    Maybe I'm wrong but or I have a soft spot for the tax man but use my own money a have expenses that make my life easier to keep down tax liability.



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  • Registered Users Posts: 1,013 ✭✭✭morphy87


    Yeah I know what your saying, so I might be better off maybe purchasing the stock with my own money and maybe spending it elsewhere to make things easier



  • Registered Users Posts: 2,111 ✭✭✭DBK1


    When you say your own money do you mean “farm” money or personal money you’ve saved from your off farm income?



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    Farm money that I have saved the past few years



  • Registered Users Posts: 2,111 ✭✭✭DBK1


    If you’ve money earned from the farm sitting in a current account at 0% interest and your accountant is advising you to borrow money at 6-7% to buy stock then it’s time to be looking for a new accountant.



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    Yeah I must look into it, something to consider before the year is out



  • Registered Users Posts: 18,013 ✭✭✭✭Bass Reeves


    I would definitely be giving that Accountant the boot as well. Actually when he suggested it I would have tidied up my affairs with him and moved on.

    Slava Ukrainii



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    So if I was putting the interest against my tax,what would you recommend put something else against my tax or just pay the extra tax?



  • Registered Users Posts: 1,379 ✭✭✭epfff


    Either or make the call each year depending on if you need something or want to build reserve/drawings anything is better than giving double the value away to get back.

    Personally I throw a bit into a pension as well that I might be the first male in my family in a few generations to live long eneough to draw. But I hope it will be of use to wife/kids if some smug expensive suit waring expert has blown before then.

    Your accountant must be fair rubish or we are missing something if he not advising you to consider making pension payments with excess income that you don't need.



  • Registered Users Posts: 18,013 ✭✭✭✭Bass Reeves


    I definately would not be paying interest just to offset it against tax. It's amazing what you can offset against tax. Cat and dog food, certain newspapers ( the rag, Tuesdays farming Indo), all tools and equipment ( it's amazing the amount of lads that forget about the smaller stuff bought in Lidl). Upgrade the main family car 2/3 is allowable against tax over eight years. All yearly car expenses ate allowable.

    Any child that is over 14 years of age can have wages paid to them. Nowadays you have to set up a revenue account. Sign the cheques in order in the cheque book and lodge in account when it suits within 2-3 months. This will help to put th.through college

    Do a bit of fencing to make life easier. I bought two Gallagher reels at a whim the other day. They are 70 euro with 300m of fence string.

    As long as the receipt says the right thing it's allowable. The list is endless.

    PS Heard a story a few years ago about a lad that got a tarmac job done around his house. The receipt said farm roadway. He put 50% of it against farm accounts and claimed the bay on this portion as well. He got a visit from revenue. He battled it out with them. There was a cattle trailer, the farm van and a few other bit and pieces parked at the back of the house. There was a few bits in a shed/garage behind it as well. It was allowed after a bit of a discussion

    Slava Ukrainii



  • Registered Users Posts: 1,013 ✭✭✭morphy87


    Thats a good one about the tarmac,id say it’s not too often you get the better of them



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  • Registered Users Posts: 18,013 ✭✭✭✭Bass Reeves


    My understanding about it is ''not to get greedy''. My understanding of it was that if he claimed the whole lot they would have fought the case. As he only claimed half and was using the back of the house to store equipment likely to be targeted for stealing it was a matter of interpretation of how much he could claim.

    If he claimed all of it or 2/3 of it they might have fought and added penalties. However as he claimed on the lower side even if they only allowed him 35-40% they could not really add penalties. However he could have appealed any decision they made and as he had made a reasonable attempt at a farm use claim it was probably not worth pursuing it with him

    Slava Ukrainii



  • Registered Users Posts: 23,198 ✭✭✭✭mickdw


    I'd take that tarmac story with a large pinch of salt.

    If everything about his taxes was 100 percent legit, ok but judging by the fact the driveway receipt went in as farm road, one would assume he was no stranger to bending the rules. That being the case, there is no way revenue just walked away from him without finding lots of stuff of interest.



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