ltd company with Farm asset/investment

JeffKenna

lakill Farm wrote: »

Jeff i think your off with the fairies. your putting across ideas and your not even half sure of them yourself. I spend 4 years in college full time and a further 3 years getting my qualification. 7 years to give an opinion which I think would work

OP go to an accountant that is fimiliar with farming. It was my first suggestion. Also pull out a set of the memo and articles of the company and make sure the company is within its remit to rent the land or farm it.

Bit harsh there saying I'm off with the fairies I must say.

JeffKenna

Farmer Pudsey wrote: »

Jeff
farming is like lots of other trades busisness you do not need proven qualifications to become involved. Getting a herd No on 60 acre would not be problemmatic as long as you have a crush and a metod of housing a sick animal you will ahve most issues resolved.

Op more than likly from a farming background and may have an uncle, father or sibling that he was giving a hand to for the last 5 years and if he is over mid 30's this will qualify him as a farmer unless regulations changed over last few years.

In any business tax planning is the most important part of a sucessfull operation. This is true of IT, building, car dealer, hotel, B&B or any other busisness involved. Farming and other small sole traders have certain tax advantages that they should avail of if building up a business if they are already PAYE workers. It is standart practice in farming for market rentals to be used to farm inside or outside a company structure. Revenue have no issue as long as realistic market values are used. In OP case this could be anywhere from 6-18K depending on land rental charges in the area and OP own tax stragety.

Pudsey, what is being proposed here is not a simple farmer working and putting any potential loss against against other income. Granted if as you say in your post the OP has family that farm that will be of benefit, but I can't see that suggested anywhere.

The situation as far as I can see is the OP will rent land from a company, farm this land and if a loss occurs use this. Now revenue only allow this if the farm is actually been farmed for the purpose of profit and in the event of an audit will test this. That is simply my point and in my opinion it's very dangerous to be offering advise to the OP suggesting this.

lakill Farm

JeffKenna wrote: »

Pudsey, what is being proposed here is not a simple farmer working and putting any potential loss against against other income. Granted if as you say in your post the OP has family that farm that will be of benefit, but I can't see that suggested anywhere.

The situation as far as I can see is the OP will rent land from a company, farm this land and if a loss occurs use this. Now revenue only allow this if the farm is actually been farmed for the purpose of profit and in the event of an audit will test this. That is simply my point and in my opinion it's very dangerous to be offering advise to the OP suggesting this.

what experience of Revenue audit have you Jeff?

lakill Farm

JeffKenna wrote: »

Pudsey, what is being proposed here is not a simple farmer working and putting any potential loss against against other income. Granted if as you say in your post the OP has family that farm that will be of benefit, but I can't see that suggested anywhere.

The situation as far as I can see is the OP will rent land from a company, farm this land and if a loss occurs use this. Now revenue only allow this if the farm is actually been farmed for the purpose of profit and in the event of an audit will test this. That is simply my point and in my opinion it's very dangerous to be offering advise to the OP suggesting this.

then did the OP suggest he was going to farm it as a sole trader? I think he asked for peoples opinion. First hurdle is the memo and articles of the company. Its all stipulation until that.

JeffKenna

lakill Farm wrote: »

then did the OP suggest he was going to farm it as a sole trader? I think he asked for peoples opinion. First hurdle is the memo and articles of the company. Its all stipulation until that.

Indeed he didn't propose any such action, it was you that proposed that.

Also to answer your above question I'm aiti qualified so yes I've plenty of experience of preparing clients for revenue audits. I also do know that what you are proposing is quite dangerous.

lakill Farm

JeffKenna wrote: »

Indeed he didn't propose any such action, it was you that proposed that.

Also to answer your above question I'm aiti qualified so yes I've plenty of experience of preparing clients for revenue audits. I also do know that what you are proposing is quite dangerous.

you will find that none of my suggestions were dangerious.

the relief of S381 is there to be used and if you have the luxury of having an off farm PAYE job to use losses well then why not? once the farmer is farming in a commercial manner then no revenue auditor will have a problem. I know many a full time farmer making losses. why are so many farmers on Farm assist? Because its the reality of the industry.

He is hardly going to go and spend €10m on machinery and sheds and keep one cow on 60 acres and never sell anything.

JeffKenna

lakill Farm wrote: »

you will find that none of my suggestions were dangerious.

the relief of S381 is there to be used and if you have the luxury of having an off farm PAYE job to use losses well then why not? once the farmer is farming in a commercial manner then no revenue auditor will have a problem. I know many a full time farmer making losses. why are so many farmers on Farm assist? Because its the reality of the industry.

He is hardly going to go and spend €10m on machinery and sheds and keep one cow on 60 acres and never sell anything.

Yes but you're comparing apples with oranges. What you are talking about are full time farmers who probably own the land in their own name, are qualified and have a history of farming.

The OPs situation seems different based on his posts and I've outlined that previously.

Be careful of what advise you give. We'll agree to disagree.

lakill Farm

JeffKenna wrote: »

Yes but you're comparing apples with oranges. What you are talking about are full time farmers who probably own the land in their own name, are qualified and have a history of farming.

The OPs situation seems different based on his posts and I've outlined that previously.

Be careful of what advise you give. We'll agree to disagree.

We wount agree :eek:. A farmer is a farmer.

I know lots of people who farm, didnt grow up on a farm. dont have a green cert and dont own land. Yet they are farmers. How many on here rent the land from their parent/s ? they dont own the land. No difference.

There are no difference in how revenue deal with you if you are part time farming or full time . Your a farmer.

gusman1859

The memo of articles are all checked and ok

I should have also said that I also own circa 20 acres in my own name (separate from the company) so the concept of leasing the company land myself is plausible.

lakill Farm

gusman1859 wrote: »

The memo of articles are all checked and ok

I should have also said that I also own circa 20 acres in my own name (separate from the company) so the concept of leasing the company land myself is plausible.

thats the way to go Gusman so .

Farmer Pudsey

JeffKenna wrote: »

Pudsey, what is being proposed here is not a simple farmer working and putting any potential loss against against other income. Granted if as you say in your post the OP has family that farm that will be of benefit, but I can't see that suggested anywhere.

The situation as far as I can see is the OP will rent land from a company, farm this land and if a loss occurs use this. Now revenue only allow this if the farm is actually been farmed for the purpose of profit and in the event of an audit will test this. That is simply my point and in my opinion it's very dangerous to be offering advise to the OP suggesting this.

The odds were always that OP was from a farming background unless he was trolling. Revenue have to have an open mind on farming it has an industry based on it that has I think 24 billion. If Revenue stopped investment in this sector from any source it would have repucussions and especially in beef could decimate the industry. The rules are there and as long as farmers obey them there is no issue.

Alan Shore

The farmland will be included in Fixed assets if you are conducting a trade of farming.

If you are letting out the farmland it will be included in investments.

I'm not sure that I would consider conducting the trade as a sole trader and paying a rent to the company. You will effectively be drawing a salary to cover the loss in order to claim the loss against the salary. The rent will be taxed at 40% in the company.

Probably best to conduct the farm trade in the company and keep the salary to spend on yourself.

Farmer Pudsey

Alan Shore wrote: »

The farmland will be included in Fixed assets if you are conducting a trade of farming.

If you are letting out the farmland it will be included in investments.

I'm not sure that I would consider conducting the trade as a sole trader and paying a rent to the company. You will effectively be drawing a salary to cover the loss in order to claim the loss against the salary. The rent will be taxed at 40% in the company.

Probably best to conduct the farm trade in the company and keep the salary to spend on yourself.

I am not a tax expert, however the issue I see is that you have to look at a method of extracting the farm from the company, otherwise you have a lot of eggs in one basket.

Dr Sir Tony Anthony is an example, maybe I am wrong it may be Sir Dr Antony Tony.

gusman1859

Hi,

I’ve been away from the boards for a few weeks and only getting a chance to check back in now. All the previous info has made me have a clearer picture of how things will pan out.

I’m hoping that someone might have the answer to the following:
Can you claim the cost of having silage made by contractors as an expense?
Can you claim the cost of drainage as an expense? Or is their vat only that you can claim? Or are there grants for drainage?

Thanks for the help.
Gus

Farmer Pudsey

gusman1859 wrote: »

Hi,

I’ve been away from the boards for a few weeks and only getting a chance to check back in now. All the previous info has made me have a clearer picture of how things will pan out.

I’m hoping that someone might have the answer to the following:
Can you claim the cost of having silage made by contractors as an expense?
Can you claim the cost of drainage as an expense? Or is their vat only that you can claim? Or are there grants for drainage?

Thanks for the help.
Gus

Contractor costs in relation to silage is a direct cost that is written off in that years accounts.

Land drainage is a capital cost that can be written off over 8 years. However all VAT can be claimed back on stone, land drainage pipes and vat on machinery. However if drainage is cleaning of drains the vat is not reclaimable but costs can be written off in year of work completely

gusman1859

Thanks Farmer Pudsey

Rp09491

I'm currently getting my fathers farm transferred to me. Does anyone kno do I still qualify for agricultural relief if I go straight into a limited company.

lakill Farm

Rp09491 wrote: »

I'm currently getting my fathers farm transferred to me. Does anyone kno do I still qualify for agricultural relief if I go straight into a limited company.

Keep the land in your name either way.

Have you green cert ??