As accountants and tax advisers, the expectation is that we will immediately venture into the usual ramblings on the tax implications of succession of a farm business, and whilst taxes cannot be ignored, with proper planning under current legislation they can be pretty much avoidable unless you are selling up.
The more sensitive matter of when it is the right time for a farming business to be passed on can be more problematic, with the older generation of farmers clinging to the family business for far too long.
The farming industry is now a complex capital intensive business and one that requires “switched on” operators. The modern day farmer needs to have a plethora of business skills and the earlier that the next generation can be brought into ownership and management of the business the better. In our experience, the optimum time can be when sons or daughters are aged 28 to 38 with father and mother likely to be aged between 53 to 63. This 10 year period prior to retirement is a fantastic opportunity to go through the whole succession process. Of course there are exceptions to this and each is to be judged on a case by case basis.
Introducing the younger generation to the business at the right time is vital to ensure their successful transition from employee to business owner. With the older generation still available to give good guidance, and energetic enough to drive the business, there should be a fully energised family of both generations ensuring maximum generational success.
Managing Director of William Duncan + Co