Roban Financial together with Frizelle O’Leary and Doyle Fielding Accountants held a very informative Succession Planning Tax Seminar in the Riverside Hotel, Enniscorthy Tuesday night 10th April last.
John O’Leary of Frizelle O’Leary focused on succession planning from a legal perspective. John spoke about the importance of making a Will and indeed regularly reviewing it, in successful succession planning in terms of ensuring who will inherit a farm or business in a tax efficient manner. John also spoke about the Enduring Power Of Attorney as an alternative to the expensive process of a person having to be deemed a ward of court. John spoke about lifetime transfers and recapped on stamp duty implications before concluding with advices in relation to the implication of marriage breakdown and the option of gradual transfer options. John’s presentation highlighted the importance of timely and good legal advise in planning for the next generation to take over a farm/business.
Eugene Doyle of Doyle Fielding Accountants expanded on John’s presentation and highlighted the tax implications of gifting/willing a farm/business to family members or indeed non family as the case may be. Eugene advised in relation to the Business Relief available and it was of particular interest to learn that a son/daughter who is gifted a farm can meet the criteria for availing of the Agricultural Relief (whereby 90% of the value of the farm/business is discounted for tax purposes) by leasing the farm out to a qualified farmer for 6 years (as opposed to having to farm the farm directly themselves).
Eugene also spoke about the current criteria for Gifts/Inheritance Tax and any exemptions for same, for example inheritance of a dwelling is exempt as long as the recipient has lived in the dwelling as their principle private residence for 3 years, does not own any other dwelling and continues to live in it for a further 6 years. There is also a favourite nephew/niece relief but Eugene did urge caution where splitting gifts. He did recommend utilising the Small Gift Exemption whereby one can gift a person up to €3,000 annually tax free.
Myles Roban of Roban Financial began his presentation by recapping on the different types of life assurance available and advised in which inheritance tax obligations can be met through Section 72 Whole of Life life cover policy. This policy grants relief in relation to the proceeds of the policy which would otherwise be liable to inheritance tax on the death of the insured person. Similarly a Section 73 Savings Plan allows for the proceeds of the plan to be used to pay the beneficiaries tax bill as long as certain criteria are met.
Myles also spoke about the different types of pensions and what happens on death and what one can do to plan for appropriate succession planning in this regard.
Jim Power was the Guest speaker for the evening and as ever gave a very interesting presentation on the Economic & Financial Outlook. Jim looked at the current economic backdrop in particular following the recent recession and where we now find ourselves in this country. Among the global risks which will impact going forward Jim highlighted severe trade market correction, Brexit and cyber crime.
The review by Jim on the economic situation in Ireland was particularly interesting. Again house prices are a focus of attention and could rise by 10% this year 2018. Interestingly Jim highlighted in 1980 household spend for housing was 7.2% while in 2015-2016 it was 19.6% of household spend.
Jim concluded by discussing Brexit. Jim feels Ireland should assume a ‘Hard Brexit’ and all businesses should plan accordingly. However Jim also felt that there will be opportunities for Irish business’s and Irish businesses will respond accordingly.
The presentations were all highly informative and we hope all attendees felt they gained some insight during the night. One thing it did highlight was the importance of liaising with your Accountant, Financial Adviser and Solicitor in putting a Succession Plan in place.