As the second successive year of reduction in Basic Payment starts to bite, with further reductions to come before abolition of the payment, more and more farming families are turning their thoughts to future diversified activities and succession of the business. This will include management of the different elements of the business but also to ownership of the underlying properties and other assets.
The key is to have an open and honest discussion with family members, so that each party’s thoughts and objectives can be aired. These will vary between family members depending on their personal circumstances but it is important that each is encouraged to let their thoughts be known without fear of reprisals. Particularly for comments that may go against others wishes –perhaps those of the older generation who may have preordained ideas as to the destiny of the business. Consider having a trusted family mediator to bring out the thoughts of quieter family members.
Compromises will have to be made to reach an agreement and differences should not be left to fester. Unresolved discussions will often result in a dispute that can lead to permanent family rifts and costly professional fees.
Taxation must be considered in any future planning but should never be the driving force behind any decisions. Often tax will need to be paid to meet family objectives and has to be accepted as a necessary cost, providing it can be minimised with some careful planning using professional advisors.