Ifac, Ireland’s farming, food and agribusiness specialist professional services firm, is advising Kilkenny farmers to consider forming a Registered Farm Partnership.
Registered Farm Partnerships (RFPs) can be a great way to increase succession options, improve profitability, enhance work-life balance, reduce Income tax, obtain 50% stock relief, and avail of a potential double ceiling on investments that are eligible for the new TAMS II Capital Grant.
Philip O’Connor, Head of Farm Support at ifac said: “Registered Farm Partnership (RFP’s) are a great business structure to allow a business grow and within family entities, they enable the road to succession. They work across all types of farms, from large-scale full-time farm operations to small and part-time farmers. Every farm, regardless of size, is different and RFP’s have the flexibility to work across almost all situations.”
Changing your farm structure is a major decision that requires careful planning. ifac recommends a three-step approach:
Step 1: Assessment
Assess the business case. Relevant tax, legal, succession and Department of Agriculture factors need to be examined and potential pitfalls identified and resolved. This is a key phase as it ensures that you are entering the partnership for the right reasons and at the right time.
The second step is getting the paperwork in order so that your partnership documentation can be submitted to the Department of Agriculture’s RFP unit and your new partnership can go ‘live’. Your herd number will need to be moved, a partnership agreement drafted, a tax number obtained and a partnership bank account opened. Herd registration forms must be sent to your local DVO for processing.
Step 3: Implementation
Your accountant will tell you the date that your new structure is trading from. This is when you start using your new partnership bank account for all farm lodgements and purchases. You must inform your customers and suppliers and ensure that invoices are issued using the new partnership name.
Thereafter, the partnership should be reviewed every year and the capital account signed/ agreed upon by all partners. For advice and assistance, contact your local ifac office where our team can provide more information and guide you through the process.
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