Friday, 14 September 2012 15:42

Tax changes more succession friendly

Written by 

Tax law changes around livestock valuation will no longer disadvantage new generation farmers following a successful submission process by accounting firm BDO.

Amendments to the proposed 'Herd Scheme' changes have been released providing exemptions for farm succession that free up new generation farmers from restrictive tax barriers.

"The exemption for farm succession has come a long way from the original proposal,"' says BDO tax specialist and farm accountant Charles Rau.

"We commend Government for listening but succession advisers will need to be careful how they structure their arrangements."

The original changes, released in April this year, would have forced new generation farmers into adopting their parent's herd scheme selection by way of the 'associated persons' rule.

"We also surveyed the BDO national network of farm accountants and found that the original Government proposals did not cover the most common forms of farm succession and made submissions to Government for change."

Rau says the amendments now cover the common 50/50 sharemilking arrangement where the child purchases the herd outright and the parents own the land. It also covers common dry stock succession arrangements such as the child purchasing the livestock and leasing the land.

"However, there are a number of restrictions, including the child not previously having an income interest in the livestock and the parents not continuing to have an interest in livestock.

"Consequently, farmers and their farm succession adviser will need to be careful to ensure that their succession plans fit within the exemption provided for farm succession."

Farmers are advised to contact their accountant or tax specialist to determine whether their succession arrangements qualify for the exemption from compulsory participation in the herd scheme.

More like this

Sentencing of MP’s son delayed

The sentencing of Tony Kuriger, the son of National Party Taranaki-King Country MP Barbara Kuriger, on animal welfare charges has been delayed until June 12 due to the COVID-19 pandemic.

New law to give bite to organics

Legislation aimed at tightening up the rules and laws on organic products has drawn widespread support from the organic sector.

Featured

Get ready for the ‘now’ norm

Get prepared for a ‘Now Normal’ future, says Ian Proudfoot – Global Head of Agribusiness for KPMG – discussing the likely effects of COVID-19 in the months to come.

 

Northland farmers count the costs

Northland farmers are starting to count the cost of one of the most severe droughts to hit the region as the cost of feed and lower prices for stock are the order of the day.

Times will get better for deer sector

While the deer industry faces several challenges in the short term, there will be a strong rebound in New Zealand venison sales once global demand recovers.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Dirty water

The Hound understands that Federated Farmers has been cut out of the information loop, for the past year, on the…

Who’s paying?

Your canine crusader noticed a full-page ad recently run in a farming paper calling on meat companies SFF and Alliance…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter

Popular Reads