Farm Incorporation Solicitor Cork and Midleton, Ireland
If your farm has reached a level of growth that requires tax in the higher tax band, then it may make financial sense to incorporate your farm. Every year Ireland sees a growing amount of farmers incorporating the family farm. Farm incorporation Ireland has become a different way of looking at your family business.
Farm Incorporation Ireland with Walsh and Partners LLP
The obvious benefit to farm incorporation in Ireland is the limited liability placed on the business. This limited liability means that the farm is now a company, it’s own legal entity if you will. Should an instance occur where you are being sued, then it is only the farm as a corporation that can be sue and not you or your family. This is of particular interest when there is multiple owners or shareholders, as with a limited company no private assets can be seized in the event of insolvency.
Another large advantage to incorporating your farm is that it makes succession planning so much easier.
Succession planning can be a bit of an ordeal and place a huge burden on individuals who are doing their best to provide for their families futures in a way that is beneficial to them and tax efficient.
Particuarly for parents with more than one child, let’s say you have one kid that’s running the business and another who you just want to provide for in the future. Incorporation makes striking this delicate balance a whole lot easier.
When your farm is incorporated, it can be easily split into shares and distributed amongst the individuals of your choosing, this is in stark contrast to the work that’s involved with sharing a business run as a sole trader. There may also be large tax benefits to taking the incorporation route.
However, should you wish to benefit from the above, you will need to establish whether this is viable for your business and your family. As with every large decision, there are pro’s and con’s.
If your farm has reached the higher tax band, then it may well make sense to incorporate your farm and avail of the lower corporation tax, which stands at just 12.5%.
Make your farm a limited company in Ireland
It is of course also very important to consider how much income you would normally draw down from the business for personal use. Any money drawn from company accounts will be subject to normal tax rates, so you will want to avoid this as much as possible.
Read more about incorporating your farm in Ireland in Karen Walsh’s article about Farm Incorporation.