Setting up a Farm as a limited company

Solar panels or extra slurry storage and write off all capital allowances this year

BBuying forward catches up with you eventually unless your profit drops significantly. You have to keep buying more every year

IInside or outside a company you will have to decide what to do with the cash. You will just retain more of it in a company. Even if you are prepared to spend e20,000 an acre very little land comes up for sale. I would think that most people let the cash build up until retirement or pass it on to the next generation. The feeling of security most be very important also

The company can carry surplus cash from one year to the next without a huge tax liability, the cash is in the company, but companies can also invest any additional cash above the cash buffer if they want.

2022 was a bumper year where the farm here would have had a taxable profit well over 150k. 2023 was a much lower profit year but we had no huge tax liability hanging over us. This makes life a lot easier.

Companies obviously are only worth considering for farms that are consistently delivering high profits and options like partnerships aren't suitable.

This is where you need a good accountant to advise what is best for individual farms.

unfortunately a lot of farms seem to have book keepers, where tax planning seems to be to panic buy machinery before year end

I don't think anyone suggested the average drystock farmer should be going into a company

same age as you and was in very similar position as you described …gone ltd over a year …no regrets

Off farm income at the higher rate and the lack of need of drawings from the farm, tipped the balance for me

Bit late to the party for this chat but just wondering what might be the best solution for myself.

I'm 31, in partnership with the father, lands going to he transferred into my name this year, we run around 140-160 ewes but my tax bill last year was near €5000, I farm part time and I'm just on the borderline of the higher tax bracket with my full time job so anything that is made profit wise is putting me straight into the higher tax bracket, were not making crazy amounts of money compared to some big suckler or dairy farmers but I'm looking to pump more money back into the farm to make life easier in the long run (sheds, handling units, machinery etc)

I know accounts will cost more going down the line of a company but the savings in tax seems to outweigh the ext accountant bills, I'm not taking a wage from the farm as well but down the line I will once I have the farm updated.

So in my case would going into a limited company be the best option?

5000 isn't much profit to put towards redevelopment of a farm.

Fix your infrastructure first then look about Ltd.

A bit off topic now, bit once you have paid your tax on the profits of the farm, can you make a drawdown to your personal/family account without any other tax penalties?

None vat registered farm

There was a loophole where company owners were able to do this, but rightly so it was closed by revenue.

Could you give example or examples of expenses that can go through company that can't be used as sole trader?

I'm interested in this because I was in similar but different here. I'm beef not large but tax bill is issue and accountant sat on fence saying he could argue for both sides leaning slightly towards company. I decided against it 2 years ago. Using pension and spending to make life easier (didn't work) now kids stating to appear as employees. My major blocker was to get money out for investment in other projects or even to purchase land.