This partnership encourages the transfer of farm assets such as land, farm buildings, CAP entitlements, livestock and machinery from existing farmers to their successors. It does this through the use of income tax incentives and gives farmers a 3 to 10 year window from the date they first registered to transfer said assets over.
The rules signal that any potential successor to a farm must be under 40 years of age in any year the tax credit has been claimed. This is to ensure that farmers implement a plan of action in the eventual event of asset transfer and a successor taking the reins.
Valerie Woods from the partnership registration office said the scheme was developed to secure the future of farming, she said “This scheme has been developed to encourage the intergenerational change essential to secure the future of farming. By facilitating collaborative working in a way that assures the long term financial security of the farmer and the successor, this scheme will increase on-farm efficiency by supporting best practice in succession planning.”
A annual income tax credit of €5,000 per annum is available to any farmers who may form a succession farm partnership. Although this is for up to five years and is split between farmers and the successors. Farmers must first form a registered farm partnership with their successor, and to be eligible to avail of the income tax credit, they must also complete the Teagasc ‘My Farm My Plan’ business planning booklet and sign a legally binding Succession Agreement.
A working group to develop a specimen Succession Agreement and explanatory booklet was formed by Thomas Curran, Farm Structures Specialist, Teagasc and included: Mr Ben Roche collaborative farming consultant, Diarmaid O’Cathain and Eddie O’Leary (solicitors), James Byrne (accountant); Revenue staff and Department of Agriculture, Food and the Marine staff.
The specimen Agreement will serve as an aid to farmers, successors and their professionals such as solicitors and accountants to create a Succession Agreement that is tailor made to their particular circumstances. Both the farmer and the successor will require detailed legal advice and taxation advice from a solicitor and accountant before completing the specimen succession agreement.
Thomas Curran, Teagasc said the scheme will provide clarity and set standards for the future, “This specimen Succession Agreement and explanatory booklet will provide clarity to farmers and their professional advisors, while also setting the standard in terms of the quality of agreements required by the scheme.”
The specimen template succession agreement and explanatory booklet can be downloaded in pdf format on the Teagasc website at the following link: https://www.teagasc.ie/rural-economy/farm-management/collaborative-farming/succession-farm-partnerships/