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What are the benefits and disadvantage of having joint herd number?

  • 16-11-2022 10:41am
    Registered Users Posts: 827 ✭✭✭

    I work away and earn a good salary but will have green cert in next few years.

    What are the benefits and disadvantages of joining the old mans herd number? Most of the things I see online are related to "good education for young farmer, makes them feel involved" kind of thing.

    I think joint herd number would be entitled to young farmer top up and TAMS 60% grant and everything a young farmer is entitled to. But is the top up for all land in the herd number? Or half of it?

    And what happens tax? Let's say the farm wasn't very profitable, would there be any tax implications? If there was a bit of tax, would the tax rate be at the higher rate due to my off farm salary?


  • Moderators, Society & Culture Moderators Posts: 3,508 Mod ✭✭✭✭Siamsa Sessions

    I'm not sure about the tax side of it, but part of having your name on the herd register is essentially a paper exercise. It shows (on paper) that you are involved in running the farm. I'm guessing your name needs to be on it for TAMS and 'young farmer' top-up too. Not sure if it applies to all or just half the land/entitlements.

    Welcome to farming, where it's all about the paperwork!

    Trading as Sullivan’s Farm on YouTube

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Ha! So true.

    I'm actually trying to read and learn about things and it's so complicated.

  • Registered Users Posts: 789 ✭✭✭dmakc

    Given your off farm income you'd probably nominate yourself as 20% (i.e. the minimum in a partnership) of the farm and your father 80%. That means everything the farm does, 20% is attributed to you - you would be taxed 50% on this 20% while your father is taxed in his own right on the 80%.

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Thanks for the info. I didn't even know you could nominate at a lower %!

    And let's say for grants, the top ups etc would that also only be allowed on 20% of eligible land? Same with TAMS grants..say a shed built for 60k. Would the 60% grant only be applied to the 12k (20% of 60k) meaning a grant of 7.2k for me while the 80% holder would get the 40% their grant part would be 40% of 48k, so 19.2k grant. Total grant would be 26.2k out of 60k cost.

    Maybe getting my own number would work out better?

  • Registered Users Posts: 789 ✭✭✭dmakc

    Not sure on top ups but for Grants I believe the % share is irrelevant. That is 60% off on the first 80k and 40% off on the next 80k.

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  • Registered Users Posts: 264 ✭✭SodiumCooled

    Hi OP, the percentage division of profits from the partnership has no impact on the top up or TAMS grants etc. So if you were to enter a partnership with your father when you have the green cert (and you are under 40) then all of the current entitlements will get the young farmer top up and if you were to go for a TAMS grant you would get the 60% on the first 80k and 40% on the next 80k as dmack highlights above.

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Thanks for the info! That's actually really good.

    I was thinking of getting my own herd number and renting a bit of land or buying some land and using minimum stocking rates to apply for BPS and take advantage of the grants.

    But sounds like the joint herd number might work out better? Joint herd number would mean I don't get my own BPS, scheme payments but the top up on the entitlements for all eligible land might cover that anyways if I only was having a small bit of land and BPS in my own name.

  • Registered Users Posts: 264 ✭✭SodiumCooled

    No problem, happy to help. In relation to getting your own herd number - unless you are eligible to apply to the national reserve to be allocated entitlements then you will have to buy them which often isn't very attractive financially. With a green cert you will be able to apply but based on your first post mentioning being on a good salary you will likely get caught by the 40k off farm income limit rendering you ineligible.

    You can still enter a partnership with two herd numbers and there are different ways to manage things. You can both operate the herd numbers and have stock though stock can't be mixed or share handling/housing facilities or you can make one of the herd numbers inactive for stock but active for payments and all stock goes though the main herd number (normally the original one). Unless you can get a national reserve allocation then going the route of two herd numbers is not really beneficial in your instance.

  • Registered Users Posts: 179 ✭✭KAMG

    If its purely just putting your name on the Herd number, the profits are taxed 50 50. So, if you are on top rate tax, all of a sudden there could be more tax than before you joined herd number.

    To avoid this, an official partnership with Revenue is required. This can be split in any ratio.

    If you need to have a register partnership with department for grants etc, you will have to have a minimum of 20% of profits.

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Thank you!

    This is very good info.

    So where do entitlements come from? Say I set up myself and applied for the BPS. Would I have to buy entitlements first? Are they bought from a farmer who doesn't want them anymore or bought from the department?

    If I had salary below 40k, would the national reserve give me the average entitlement? And then I'd get 25% on top? Plus 25% as part of the young farmer scheme?

    As I'm over 40k that wouldn't work anyways, but just curious.

    So it seems to me, the own herd number wouldn't be worth it at all.

    When you talk about partnership with two herd numbers, you still mean the entitlements and BPS would still be on the one herd number right? I wouldn't see the benefit of having seperate stock if the BPS was only going to apply to one anyways.

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  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Thank you!

    So it would appear that being a partnership with 20/80 split would be best as I earn over 40k off farm.

    I'd limit the tax increase from farm profits and would still benefit from young farmer top up and TAMS Grants

  • Registered Users Posts: 179 ✭✭KAMG

    Yes. That's what I'd advise. Your parents accountant should be able so set the partnership up with Revenue.

    You have enhanced stock relief too.

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    I've not heard of stock relief before. Seems like you can use increasing value of your stock to offset profits.

    So if you projected a profit of 5k euro, a farmer in general could grow their stock value by 20k and get stock relief of 5k (25%) and pay 0 tax. I guess 100% stock relief allows the stock to grow in numbers. It wouldn't be relevant for me as the stock is maxxed out anyways but great to know.

    Another question on stmp duty. Do I have to have a herd number to claim 0% rate under 35 . The full rate applies over 35 right?

  • Registered Users Posts: 8,626 ✭✭✭893bet

    I believe the 40k cap on off farm income was removed last year.

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Doesn't appear in the 2020 qualifying criteria. Would it make more sense to have own herd number then?

  • Registered Users Posts: 179 ✭✭KAMG

    The conditions for 0% stamp duty are

    under 35 years of age

    hold a green cert

    submit a business plan to Teagasc

    be registered for Income Tax

    and be the head of a holding. So, you would need to either have your own herd number or be the majority partner of a partnership.

    spend at least 50% of your working time on the farm

    and retain ownership of the land for 5 years plus

  • Registered Users Posts: 827 ✭✭✭farmingquestion

    Disappointing. I thought green cert was enough.

    If I buy land tomorrow, can I claim stamp duty back if I get the green cert and a herd number? or do I have to have a herd number when I buy it?

    green cert teacher said herd number wasn't needed