Ltd Company Forming Separate Entity

[Garmin23]

Hi All,

Wondering if someone could shed some light on below;

I have a small ltd company in operation which is VAT registered - This company is non agri related.

I come from a farming background and recently just completed the green cert (age less than 35yrs). There is rumors that land may be coming available for rent next to my home place in which I would be interested. Please note the home farm is not in my name but my fathers and is not in a ltd company.

My thoughts on this is to set up a separate entity to my main company and farm through this. The reason been, I'm currently taking a wage at the lower tax bracket, any additional income I would be taxed at the higher rate. I can live at this wage comfortably and don't require extra money personal if it's going to be taxed at the higher rate. All grants and income from the farm would go through the company which would allow me to have greater cash flow in the company and would allow me to purchase machinery to carry out daily farm tasks. The min lease would be 5 years.

Any input if the above is a wise decision or not would be greatly appreciated.

 

[T McGibney]

First, ask your accountant. It's impossible to advise meaningfully without knowing your own and your company's situation and prospects.

Some of the wiser heads among the farm tax advisory community suggest that incorporation is only suitable for a small minority of ultra-profitable farm enterprises, which would I expect rule out almost all part time farm. Besides as farm subsidies are paid only to individuals and not to incorporated bodies even where an incorporated body carries on the farm trade, you would remain subject to income tax, PRSI and USC on this element of the farm earnings, which might well negate the tax savings you would otherwise expect to achieve from incorporation.