Farm Structure

Your farm business structure should be appropriate for your farming operation, some have complex ownership structures and there can be a misunderstanding about which entity owns on-farm and off-farm assets.

Your farm operating structure is generally not a set and forget, with periodic reviews of your existing business structures to ensure they meet your business and family objectives.

The focus of farm business structuring

Asset protection and tax minimisation generally form the focus of farm business structuring. Having the correct structure, with separation between business, land and personal assets minimises the risk and exposure of your personal assets.  You want your personal, land and off farm assets protected from the operation of your farm enterprise.

Your business structure is important for the succession of your farm, correct structuring can minimise the tax and transfer duty costs of passing the farm to your children. It will also allow for provision to be made for children that may not be on the farm.

Determining the best business structure

Common business structures include family trusts and companies, and partnerships containing one or both. For farmers consideration needs to be given to the benefits of accessing primary production averaging, farm management deposit, average rates of tax as well as the company rate of tax when determining which structure is a best fit. Your family circumstances around cash requirements and debt levels also play a part.

There is no universal right structure, your individual circumstances play a part in advising the best business structure for you now, and the flags for when a change to your structure need to be discussed.

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