NFU Mutual launch succession planning service for farmers
NFU Mutual have launched a succession planning service for Britain’s farmers after it emerged less than four in ten farming families had an effective plan.
Of Britain’s three million family businesses, only 30 percent successfully pass the company on to the next generation.
Sean McCann, chartered financial planner at NFU Mutual, said: “Making sure your plans are structured in the most tax efficient way is critical to successfully passing on the business.
“A key part of succession planning is making sure that all members of the family involved in the business have valid wills and, where appropriate, a partnership (or shareholder) agreement is in place. This will ensure the ownership of the business ends up in the right hands at the right time.
“When giving assets away, it’s important to consider what would happen in the event of a son or daughter divorcing in the future. Pre-nuptial agreements can help protect the family business. Getting the right legal advice in this area is essential.”
“As the insurer of three quarters of the UK’s farms, we know that farms are not just a business but a way of life, often spanning generations and involving the whole family.
“Whether the plan is to hold onto the farm until death, or give it away during lifetime, having a plan in place will ensure the transition happens more smoothly – and our new service can help start difficult conversations and lead families through the steps to putting in place a sound, financially viable plan.”
According to the Institute for Family Business, psychological and cultural pressures are important factors and it is common for plans to be hindered by worrying: “Fear of mortality, reluctance to let go of power, and worries about seeming to prefer one child at the expense of another are just a few examples of complex forces favouring avoiding the succession issue and adopting the ‘do nothing’ option.”
