Ask a solicitor: It's really time I transferred the farm - what do I need to know?

What are the next steps? What do I need to transfer the farm? How long does it take, and how much does it cost?

Dear Reader,

I know it is difficult to hand over the reins, but it is something that every person who is running/owning a farm needs to think about at some point, and it is best that it is not done in haste or rushed into, for example, when someone has become very unwell or is on their death bed.

I note that your son is due to turn 35 in the next few months and he is farming, which will mean that he will be in a position to avail of the Young Trained Farmer Relief in respect of Stamp Duty on the transfer provided the transfer takes place before his 35th birthday.

It is important for you to make sure that you are financially secure after your transfer such a valuable asset. Do you have other property? Do you have enough monies in a bank account etc to fund your lifestyle? It is important to feel financially and emotionally secure once you transfer the farm. You can insert clauses into a deed to give yourself security, such as a right of maintenance and support from your son for your lifetime if you ever needed it in consideration of giving him such a valuable asset.

To commence matters, what normally is needed, is a valuation from an auctioneer of what you intend transferring to him. This means that all farmlands that you are giving to him would need to be valued. If there is a farmhouse that is being transferred, this will also need to be valued. If there are any EU farm payments, machinery, stock, Dairygold Shares etc., these will also need to be valued.

If you are retaining some land, or if you are putting certain rights over a dwellinghouse and not the land or vice versa, then you may need to engage an engineer to prepare a Land Registry compliant map or maps. If rights of way or wayleaves are needed for the benefit for a house etc., these will all need to be detailed on a map by an engineer.

Once a full review of your title is carried out by your solicitor and you give instructions to your solicitor as to what you propose transferring, then this can be finalised, and you will be advised as to whether an engineer is required at all.

If your deeds are with a bank and are mortgaged, then your bank will need to consent to the proposed transfer. In any event, your deeds will need to be given to your solicitor if they are with a bank and there is no loan on the property, so that your solicitor can review your title deeds. There may be old bank charges or Burdens on your title that might have to be removed from your title in order to effect the transfer.

If a house is being transferred, this is not exempt from Stamp Duty and your son will have 1% to pay on the market valuation of the house. It is slightly less if a right of residence is being retained over the said house.

Your son will also need to get organised and put a business plan in place, certified by Teagasc in order to claim Stamp Duty Relief. This needs to be done and attended to in advance of the transfer taking place, and he will also need to produce to his solicitor evidence of the required agricultural qualification or qualifications for the purposes of availing of Young Trained Farmer Relief.

It is prohibited now for one solicitor to act for both the transferor and transferee, so independent legal advice must be given to both parties, and your son will need to engage an independent solicitor in respect of the transfer.

What is crucial also, is that tax advice is obtained in advance of any paperwork being drafted up and executed. This is a very important step and can sometimes take some time, so it is very important to engage a tax consultant/accountant to give advice in respect of Stamp Duty, Capital Gains Tax and Capital Acquisitions Tax, and to see if there are any reliefs available to you and your son to minimise the tax payable.

A transfer can be done in a few weeks, but this is not advisable. Normally it takes a few months, and it is not a good idea to rush into it and it is always wise to obtain full tax advices and ensure that you have full knowledge of the tax payable before paperwork is drafted and executed.

Once the deed is signed, it is stamped with the Revenue Commissioners and lodged in Tailte Éireann for registration. Fees can vary from transaction to transaction. Some transactions are very straightforward, and others are very complex and can take many, many months.

There can be different complexities with transactions, for example, other family members may need to be looked after, sites may need to be retained out of the farmlands for other family members, a bank may need to consent to the transfer, leases may need to be drawn up etc. Your solicitor will furnish you with an estimate of costs once they have all the information to hand at the outset of the transaction.

Karen Walsh, from a farming background, is a solicitor practising at Walsh & Partners Solicitors, 17 South Mall, Cork, and 88 Main Street, Midleton, Co Cork, and also the author of 'Farming and the Law'. Walsh & Partners also specialises in personal injury claims, conveyancing, probate, and family law.

Email: info@walshandpartners.ie 

Web: www.walshandpartners.ie

• While every effort is taken to ensure the accuracy of the information contained in this article, Karen Walsh does not accept responsibility for errors or omissions howsoever arising. Readers should seek legal advice in relation to their particular circumstances at the earliest opportunity.