Succession plans are vital for the future of family farms
David Brown, deputy president, UFU.
Ulster Farmers’ Union (UFU) is encouraging farm families to discuss the future of their farm business and to put a succession plan in place. The statement comes following the release of new research by The University of Exeter in collaboration with NFU Mutual, highlighting that fewer than one in seven farmers in Northern Ireland expect to fully retire.
Only 13.6% of NI farmers expect to fully retire meaning they are less likely to have discussed retirement plans with their family. In comparison with their English and Scottish counterparts, NI farmers are also less likely to have a will.
“Discussing the future of a farm business and inheritance, can be an extremely emotional time for farmers and their family,” said David Brown, deputy president, UFU. “Farming is seen as a way of life and not a nine to five job. The majority of farmers have continued to dedicate their time to their land and/or animals maintaining ownership long after traditional retirement age, making it even harder to step aside.
“I urge farmers to take into account that in order to ensure that their farm business which they have invested blood, sweat and tears into, can continue to thrive and flourish, a succession plan is essential. Ideally the discussion should be had with family long before retirement age as none of us know what lies around the corner, but if this has not yet been done there is no time like the present.”
The future of the agriculture industry lies in the hands of the next generation. The UFU says it is vital that they are involved in succession plan discussions and understand their role moving forward.
John McCallister, officer of the Land Mobility scheme in NI, said: “The Land Mobility programme can play a vital role in providing options for older farmers. It can help identify a possible successor and assist in the transition. Those options might well range from full retirement to stepping back in a gradual way.
“It is very important that our farm families talk about, plan and manage succession and any support I can provide, I am happy to do that. It is important to remember that the key part is who manages the farm business, not always focusing on who owns the land.”
Martin Malone, regional manager at NFU Mutual, said: “Handing over the farm doesn’t have to mean giving away the ownership of all the assets on day one. It can be helpful to think about the management of the business and ownership of the farm as separate issues, allowing you to hand over more of the day-to-day management of the business while retaining the ownership of the assets to a later date.
“One option favoured by many farming families is to set up a partnership which can give the younger generation a stake in the business. According to our research, this is an option Northern Irish farmers utilise more than their counterparts in England and Scotland.
“If you are planning to hand on assets during your lifetime, one of the taxes you need to be aware of is Capital Gains Tax (CGT). A lot of people don’t realise that you can pay CGT when you make a gift. There are some tax breaks available to help you defer the tax, so getting the right advice is vital.”
Farmers can access NFU’s guide by visiting the following link: https://www.nfumutual.co.uk/farming/farm-handover/. Local charity Rural support can also provide assistance in regards to retirement and succession planning, https://www.ruralsupport.org.uk/