The importance of having a legally drafted farm succession plan is paramount in these difficult times as forward planning becomes a crucial factor in the survival of rural farms and rural small businesses.
Under the NSW Government’s Farm Household Allowance, an Activity Supplement payment of up to $3,000.00, payable to both you and your partner ($6,000.00), can be used to obtain professional legal advice on succession planning that will help improve you and your family’s future business sustainability and secure your financial position.
In a study published in 2005, it was reported that over a quarter of Australian farms were being run by owners who are over 65 years of age, making succession planning an issue of dire importance. It has also been reported that nearly three quarters of farmers in their mid-fifties have no retirement plan in place.
We understand that Australian farmers, because of their strong work ethic, do not focus on retirement however, it is inevitable that at some stage, the older generation will need to take a step back and allow for the younger generations to step up into a position of greater control and/or ownership of the farm assets.
The discussion amongst all family members needs to begin sooner rather than later. By identifying each member’s interests and aims, and identifying a successor or successors, a retirement and succession plan can be created. Once this conversation is underway, we can assist by providing advice on your options, the procedure to achieve you goals, the likely costs particularly stamp duty and capital gains tax issues, ensuring the older generation’s financial interests are protected and assisting in the effective transfer of control to the successors.
Under the Farm Household Allowance, the eligibility requirement is that you are a farmer, or a partner of a farmer, are 16 years of age or older, you contribute labour and capital to an Australian farm, or are the partner of a farmer who does, you meet the income and assets test, are an Australian resident and have had less than 3 years of the Farm Household Allowance.
Please contact Everingham Solomons to have a discussion with a legal practitioner today about the future of your family farm because Helping You is Our Business.
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