The Gazette 1980

GAZETTE

JULY-AUGUST

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FARMING AND FINANCE Paper read to the Law Society Annual Conference by W. A. Osborne, Solicitor

One of the crucial elements in relation to farming and finance is the full usage of all available land, its transfer within the family and its devolution from generation to generation, all of which are complex matters. The preface to the 3rd Edition of Cherry's Irish Land Law published in 1902, comments that in the ten years which had elapsed since the 2nd Edition was published in 1892, seven new Acts of Parliament had been passed dealing with Land Law and the then new 3rd Edition contained reference to approximately 800 new cases decided in that ten year period, bringing the total number of reported cases referred to in the 3rd Edition to more than 2,000. Nonetheless, there are many uninformed people who say that the ownership of land, its usage, sale, disposal and devolution should be a simple matter to arrange legally; indeed as simple as the transfer of ownership of a car. That is, as we know, not so. "THE LAND ACTS" The introduction of the Land Acts towards the end of the 19th Century provided machinery whereby a tenant occupier could acquire the freehold ownership in the farm so occupied. To a large degree this legislation defused the land agitation, which had existed continuously over many years and which had bedevilled farming. But with that right of freehold ownership came a feeling of possessiveness in relation to land, which in turn has created problems in its user, its devolution and availability. The possessiveness to which I have referred is understandable, in that for generations, a land war was fought with the tenant occupier, under a Landlord and Tenant system, coming off second best and hence, once the freehold ownership was achieved by a tenant, he became dogged in his determination to retain ownership and that determination not to part with ownership is reflected in the attitude of many farmers who are reluctant even to consider a transfer, or sharing of ownership with their own family, or to retire, having reached an age at which one is incapable of farming fully. It is for that reason I believe that the E.E.C. and Land Commission farm retiral schemes, designed for older farmers, have not succeeded. TAXATION AND THE PRACTITIONER Allied to this reluctance are the problems created by Inheritance Tax and Gift Tax and to a lesser degree, but equally important, by the family legal rights created by the Succession Act of 1965. Hence we have a combination of social and legal problems. A substantial part of our work as Solicitors, particularly country practitioners, but not by any means exclusively so, is concerned with family advice in relation to the family farm, its usage, transfer and devolution. It is not part of my brief to deal in detail with taxation problems, but having overcome the basic reluctance to transfer or change ownership within a family, any intended transfer of ownership or of part ownership, or of part of the farm must then be very fully considered and

discussed in all its aspects, to include taxation. It is helpful to bring as many members of the family as possible into all such discussions, so that all concerned will fully appreciate the tax implications, the difficulties confronting the parent who wishes to make a transfer to one of the family, namely the uncertainty as to whether that person is capable of taking on the responsibility of providing adequately for the remainder of the family, including particularly the parents, or whether that person will indeed be willing or inclined to do so. The uncertainties as to whether the member of the family will marry and should he or she do so, will ownership, should that member of the family die in the parent's lifetime, pass the property on to his spouse and will he or she be able to provide adequately for the parents and family, particularly if the spouse has a family of his or her own to provide for; or will she be forced in such circumstances to dispose of the property and if so, where will the parents and the remainder of the family stand. On the other side of the picture is the farming son or daughter who has remained at home, contributing full time to the farm and its working and receiving in return keep and maintenance and small sums by way of pocket money and who is understandably eager for and perhaps insistent that his or her future be provided for, by means of a transfer of ownership of the farm, or of part of the farm and perhaps also insistent on having a greater say in the running and operation of the enterprise. When confronted with these uncertainties and dilemmas, more often than not, any thought of an immediate transfer is postponed and the frustration of the farming son or daughter grows, resulting in a very unhappy relationship, which can, despite even a great measure of understanding and goodwill, most certainly in time lead to a rift in the family, which will be difficult, if not impossible to heal in the future. UTILISATION OF FARMLAND Apart from the problems associated with the family farm, it is now generally acknowledged that there is a vast under-utilization of farm land. Despite the fact that it plays a vital role in the economy and is one of, if not indeed our prime source of wealth. This state of affairs usually occurrs by reason of circumstances outside the immediate control of the land owner and is probably by reason of family circumstances, or lack of capital or equipment, but more often than not, it will arise by virtue of old age, illness, or other incapacity, the unavailability of assistance on the farm, there being no child or other near relative to inherit or assist in the full working of the land, or small holdings which are incapable of being farmed economically, or which are unable to provide for the owner the basic necessities of life and necessitate part- time off farm employment. There is a general belief that farmers individually are owners of large tracts of very valuable land. The current urban belief that all farmers are possessed of wealth which is capable of providing substantial income permitting them to live like semi-millionaires, is so far

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