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 the wettest winter 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 2007, a survey undertaken to look at farm structure in the UK recorded that 58% of sole holders were aged 55 or over with only 3% being under 35. More worrying is that in the same year, 28% of farmers were over 65. 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 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.