Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


How to take the anxiety out of farm succession planning

How to take the anxiety out of farm succession planning
22 July 2014


Many farmers put succession planning into the too hard basket because of rising capital values, but it’s a crucial process that will be a lot less fraught with danger if family members are involved in the process, says Neil McAra, Crowe Horwath’s Managing Principal - Southland.

“It’s never too early to start planning for retirement and farm succession,” said Mr McAra, who noted that one key to a successful plan was distinguishing between reward for services provided by family members and the risk/reward for ownership/investment in the business.

Another key element was for the farm owners to ensure they had considered whether they would have an ongoing role in the business, and define what that role would be.
“To alleviate the possibility of things getting off track, it is important to ensure that owners adequately plan for the future of the farm and the people within it, so that all runs smoothly and they can enjoy the transition process.”

The key considerations include:
The plan must ensure the family remains a family
The retiring generation must have an inflation-proofed and guaranteed income
The succeeding family must have a reasonable chance of having a profitable business with an ongoing business on final settlement
There must be a plan for non-succeeding family/ family members
Passing assets and/or control of operations to the next generation either on retirement or death
“There’s no one size fits all solution,” said Mr McAra. “The degree of involvement and timing of input by family members will vary from case to case. But the succession plan should ultimately be understood and agreed on by all family members.”
However, the degree of involvement and timing of input by family members would vary from case to case, he said.
Mr McAra noted that there were many technical considerations involved in setting down a succession plan that should be discussed with an accountant and legal adviser, working together.
The technical areas included matters such as legal ownership, trusts, companies, and the tax impact of transferring the different assets, including buildings and livestock.

“Every farm and family is different so you need to involve the right people early on,” he said. “A team approach will bring the best results.”
ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news