Guidelines for forming a registered farm partnership

Eamonn Dempsey provides essential information on the process, benefits, and requirements for forming a registered farm partnership, including eligibility, financial considerations, and the application procedure.

Registered farm partnership applications are accepted and processed year-round. However, if applicants wish to have their registered farm partnership in place before the BISS deadline in mid-May, completed applications with supporting documentation must be submitted before the deadline, which is typically set in February each year by the DAFM. Now is a good time to consider forming a registered farm partnership by evaluating key areas such as eligibility, social and financial benefits, and the application procedure.

A registered farm partnership is an ideal arrangement for the gradual transfer of management and responsibility for running the farm. Sons or daughters can be formally recognised in the farm business at an earlier stage, while parents provide support, advice, and experience to their successors. No land transfer is required, and the partnership introduces new ideas, farming methods, skills, and abilities to the business. Registered farm partnerships also offer a business structure for young farmers to enter into an arrangement with an existing farmer who has no successor.

It is important to identify the financial benefits of forming a registered farm partnership with your accountant or tax adviser. These benefits may include income tax returns, stock relief, TAMS grants, collaboration grants, and profit-sharing ratios. A new registered farm partnership bank account should be opened, listing all the partners. All income and expenditure from the partnership must go through this account.

Your agricultural adviser will guide you on whether any members of the partnership are eligible for schemes such as Complementary Income Support for Young Farmers, the National Reserve, and other programmes. The success of the partnership depends on having a well-prepared on-farm agreement that clarifies how the farm will operate on a day-to-day basis. A solicitor may be needed to make necessary amendments to the agreement, draw up or update a will, and liaise with an accountant or adviser.

Good communication is vital. Keep your partners informed at all times, listen to and respect other points of view, and work together to plan and make decisions. There is no requirement to change herd numbers when entering a registered farm partnership. However, if a trained son or daughter, who has never farmed independently, is joining the partnership, they may be required to join the herd number using an ER1.1 form. When two farmers with separate herd numbers come together, the usual practice is to make one herd number dormant (but not end-dated) so that it remains viable for scheme payments, and to transfer all stock to the remaining herd number.

If forming a partnership, ensure you meet the eligibility and educational standards. Once all the appropriate documentation is submitted, the registration of partnerships is normally completed within three to four weeks. Farmers wishing to establish a succession farm partnership must already be in a registered farm partnership.