Money Mentor: when should I add my son to the herd number?

Questionl: I have a question regarding my herd number. My son helps with the workload on the farm, and my agri adviser said I should look at putting him on the herd number now that he has received his green cert, as this would allow him to receive the Young Farmers Scheme.

This sounds like it would be beneficial, but I’m wondering if it’s really that simple? Do I just add him to the herd number, and that’s it, or are there other considerations I should be aware of?

Answer: This is a question that comes up often. Farmers often focus on the benefits of putting a child on their herd number and then forget about, or are unaware of, the other financial and legal ramifications. Let’s go through them so that you’re making a fully informed decision.

Firstly, adding an individual to your herd number can potentially change your business structure, so make sure you review it with your accountant and solicitor before doing anything.

Secondly, it’s important to know if your son genuinely wants to be part of the farm. Claiming young farmer subsidies means he’ll have to be actively involved in the farm for at least five years. If he wants to travel or isn’t quite ready for this commitment, maybe it’s not the right time to add him.

For now, let’s assume he’s ready to start his farming career.

Possible implications

Let’s say you don’t seek legal or taxation guidance and simply go ahead with creating a ‘joint herd number’. You add your son so he qualifies for the 2025 Young Farmers Top Up Scheme and/or the National Reserve. By creating that joint herd number, you may unintentionally create a partnership from a legal point of view, which has potential consequences.

Applying for a joint herd number will generally require:

These requirements matter because many of the same ones are used to determine whether a partnership exists or not. That crossover means that if your situation is deemed to be a partnership, you could accidentally and unknowingly:

Recommendations

Changing farm structure is a big decision and all potential Department of Agriculture, Revenue and legal implications should be reviewed before doing anything. Your accountant/solicitor must decide on the exact partners in the partnership before you apply to move your herd number to the new joint names.

Once your accountant and/or solicitor have examined the structure, and advised that it makes financial, succession and legal sense, you can then look at how this proposed change will work with the Department of Agriculture.

In joint herd number scenarios, it is strongly advised that a partnership agreement is completed so it’s clear from day one what assets are coming into the partnership (eg stock/machinery) and what assets are being licensed (eg Basic Income Support and Sustainability Scheme and land). The partnership agreement will also set out the profit share between partners.

‘Registering’ the partnership (joint herd number) with the Department of Agriculture is an extra step available to farmers. Registering gives you access to a number of templates that you can adapt and clear guidelines on how the partnership will work. There are also increased TAMS grants available, so again, this is advisable.

Whatever structure your farm is in, the name(s) on the herd number, the bank account and the income returned to Revenue should always match.

A properly planned partnership such as a registered or unregistered farm can assist in the farm transfer and succession process, enhance profitability and work-life balance, reduce income tax, secure 50% Stock Relief and give a potential double ceiling for the new TAMS II Capital Grant.

Marty Murphy is head of tax at ifac, which is the professional services firm for farming, food and agribusinesses.