Legal Briefs: Transferring The Family Farm

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The continued survival of a family farm depends on the smooth transfer from one generation to the next.

And yet, you would be hard pushed to find a farming family in Ireland that hasn’t seen a quarrel over land and succession at some point.

Alex Hoffman of Pierse McCarthy Lucey Solicitors outlines the factors to be considered when managing this tricky process…

Succession and inheritance is a complex subject. There is no “one-size-fits-all” answer and no magic formula to guarantee the successful transfer from one generation to the next.  However, by seeking legal, agricultural and financial advice, major pitfalls can be avoided by planning ahead and putting a succession plan in place.

Obvious topics for discussion and inclusion in the plan would include the following:

Financial independence of the retiring farmer

With average life expectancy now in the mid-80’s, retiring farmers and their spouses need to provide for a potential retirement period of 20 years or more.

The retiring couple should consider whether one or both of them will be entitled to receipt of private and/or state pensions. There is some scope for advance planning with regard to the state pension and it would be important for anyone intending on retiring within the next ten years to consult with the Department of Social Protection and their accountant to establish what their entitlements are.

The living arrangements regarding the farmhouse will also be of great importance. As the farm buildings will very often be close to the farmhouse, the decision must be made whether the retiring couple retain the farmhouse, or reserve a right of residence, maintenance and/or support?

Consideration should also be given to the future expenses such as the costs of medical and nursing home care.

While the Fair Deal Scheme (and its pit-falls) would merit an article in itself, suffice it to say that there is scope for planning and anyone who is thinking about retirement and feels that Fair Deal may be for them, should discuss this with their accountant and Solicitor as early as possible.

Continuity of the farm business 

A financial analysis of the farm business should be completed with Teagasc and the farm’s accountant.

Profitability is key to any business, and farming is no different. If the farm is not making money now, what can be done to ensure that it remains viable in the long run?

It should be borne in mind that it is open to a farmer to transfer the land but to continue to take part in the business of the farm in a partnership. This is very much a personal decision based on the lifestyle choice of the farmer and his/her income requirements.

Consultation with family members

The transfer of a family farm is much more than just a simple business transaction. In some cases there could be up to four generations living on the farm, with the land being owned by one.

All members of the family should be consulted, with open and honest communication being essential for successful planning. The main aim is to have an open conversation, so that future misunderstandings can be avoided and those involved will know what to expect.

Minimisation of taxes

While it is important to consider the tax implications, it shouldn’t become the sole focus of the plan. Taxation is inevitable, and the aim should be to transfer the farm business as efficiently and effectively as possible.

The main taxes to consider are Stamp Duty, Capital Gains Tax and Capital Acquisitions Tax and there are reliefs available in respect of all three. With good advance planning and preparation, the issue of taxes should not have a major negative impact on the farm business transfer.

Legal issues

Regardless of whether or not the farm is to be transferred, it is important to make a will and keep it updated. For too many people this task remains on the “to do” list and never gets done. Without a will you have no say on what happens to your assets when you pass away.

An Enduring Power of Attorney is a legal document where the donor appoints an attorney who will have the power to act in their place if they become mentally incapable or unable of looking after their own affairs.

This can happen as a result of a disease (Alzheimer’s or dementia) or brain damage as result of an accident. Again, you are never too young or old to have one in place.

* The material contained in this article is for general information purposes only and does not constitute legal or other professional advice. No liability whatsoever is accepted by Pierse McCarthy Lucey for any action taken in reliance on the information contained in this article.

Alex Hoffman has considerable experience in Agricultural Law, Commercial Law, Probate and the Administration of Estates, Taxation, Residential Conveyancing. A Bachelor of Laws in Law & European Studies, AITI Chartered Tax Adviser (CTA).

To make an appointment with Alex Hoffman, contact Pierse McCarthy Lucey Solicitors, 9 Ashe Street, Tralee, between 9:00am and 5:30pm Monday to Friday, on 066 7122900 or email

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