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

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news