Have you thought about succession planning?
Released On 28th Apr 2024
Spring is in the air, Autumn crops are enjoying a respite from the rain, lambing is well under way and the ground is now being prepared for sowing spring corn. With farming entering such a busy phase as well as farmers in our region recovering from one of the wettest winters on record thoughts are probably far removed from succession planning and mitigating inheritance tax liability, but it is dangerous to have such issues at the bottom of your to-do list.
In 2016, a survey undertaken to look at farm structure in the UK recorded that 40% of sole holders were aged 65 or over with only 2% being under 35. Equally worrying is agriculture typically has an aging workforce, with the average age of a farm holder recorded as being 60 years old. There is no indication that this trend is reversing. Increased mechanisation makes such statistics plausible but with farmers working far later into retirement than others perhaps this again means farmers are less inclined to consider succession and the future of their business.
The key message has to be – don’t leave it too late. It is so important to sit down, preferably as a family, to discuss how the farm business will be passed on to the next generation. It may be considered simple if there is one child who has chosen to stay on the farm, but complications can arise in particular when a third party is brought into the business on marriage. This could be further complicated when two children remain in the business and the acreage, without diversification, is unable to support its growing dependants.
With such complications it is easy to bury your head in the sand – leave the issues for another day. But don’t. At Porter Dodson our specialist teams can sit with you to discuss at length the most suitable succession plan for your business. Timely and planned lifetime gifts and careful Will drafting will not only mitigate inheritance tax but will also give you peace of mind that you have done all you can to safeguard your business.
