Selling Cows To Buy Land
- Thread starter sheep&cows&stuff
- Start date
d williams
Member
Get your accountant to advise but I’m sur you can get out of breeding stock tax free but not allowed to go back into them for a number of years
Please take advice as this was a numbet of years ago someone told me that
- Location
- South West
Good on you. Thinking outside the norm and having a go will generally help you get where you wanta be in life. GOOD LUCKSome advice needed. Or rather, opinions
Have told my background story on here before, so wont repeat myself..
Situation is I put up a cattle shed last year (only completed in Nov) which cost me £50,000. The funding came from my day job as farming is not yet making me any money.
Anyway, I knew as soon as I made a large investment that some land would come up for sale - in typical fashion I was right!
I have been offered the chance to increase my owned acreage by around 25%. (Less than 15 acres). I rent some land off a retired couple who have children (none of which want to farm) and they approached me about buying 1/4 of the land (separated by a road) off them on the quiet.
I will not borrow to fund this purchase as my wages are already taken up with mortgages / loans / insurance etc. However, I cannot turn down the opportunity as land in my area has not come on the market in the last 20 years and if I decline to buy the 1/4 share of the land when the time comes that they want to sell the 3/4 share (that time will come) then the will count me out as I could not buy the smaller share.
Anyway, I have decided to sell all the cattle to fund the land along with some cash I have saved. I will start from scratch again (was considering filling the new shed with Friesian bull calves and rearing to bull beef under 16 months old). Cheapest way to get back into stock.
I would not rent out the shed as I could not stand seeing a brand new shed wrecked by someone careless. I Will bale the grass and sell as round bales until I need them again.
Deal has not been done yet as they have not came back to me with a price. I have a limit in my head which is more than it is worth so should not be a problem.
There are close by neighbours that would buy it in an instant should I decline.
Such a pity to finally have everything I need to suckler farm on a green field site and have to sell all my cows! But that's life haha
sheep&cows&stuff
Member
Walls are removable panels so can go against tax. Shed receipt was wrote for 'shed repairs' so can also go against tax. I am VAT reg....but how does VAT reg help the situation?As long as a part of the shed cost was internal fittings etc then you'll be making a loss for a couple of years.
The frame, roof and any concrete floor won't be allowable against tax.
Speak to your accountant.
It might be worth you going vat reg for a year or two?
But as has been said don't let your decisions be altered by tax fear. Crack on.
Nearly
Member
- Location
- North of York
You'd be surprised how many farmers aren't vat reg, that's all. Crack on.
probably best not to advertise this fact on a public forum.
Courier
Member
- Location
- M62 - M1 - M18 triangle
And these farmers still think that they are good business men [emoji15][emoji22]
livestock 1
Member
There may well be another reason for that
- Location
- Scottish Highlands
Struggling to think of any reason for not being registered. What could possibly be a driver for not getting back a 20% rebate on all equipment purchases and most inputs?
livestock 1
Member
I would rather not say. I do know a few that aren’t vat registered that obviously should or could be and there was only one conclusion I could get to .
bobajob
Member
- Location
- Sw Scotland
Hope you dont mind me bringing this back up. How did it work out in the end?
Did you sell the cattle to buy the land.?
Did you sell the cattle to buy the land.?
sheep&cows&stuff
Member
Damp squib unfortunately - he was looking too much so no deal. Haven't seen it on the market yet though so there is still hope.
toquark
Member
Annoying. Always useful to go through the thought process and it hopefully leaves you clearer in your mind about your strategy should it come up again. Personally I wouldn't hesitate in liquidating livestock in favour of buying land. You can buy stock every day at the market, you may only get a chance at neighbouring land once!
Bossfarmer
Member
- Location
- between Perth and Inverness
does it not depend if you are on herd basis?
Bossfarmer
Member
- Location
- between Perth and Inverness
does it not depend if you are on "herd basis"?
livestock 1
Member
Yes herd basis or flock basis gives more flexibility for change
Bossfarmer
Member
- Location
- between Perth and Inverness
on the subject of herd basis could someone explain what would happen to someone on herd basis with 200 cows if they grew their herd to 300 and then a bit of land came for sale and the herd was sold? would there be 0 tax to pay?
- Location
- Cumbria
Owning lots of assets is good, if you want to borrow money, or off-set business risks, however you need cash to operate. You have clearly stated you have no free money to repay a loan, so selling assets to buy, is a sound move IF your long-term objective is to grow and expand, and you can still operate.
Land next door rarely crops up for sale, so if the chance comes your way, of course it can throw a spanner in the business plan and make you re-think a way forward.
If you're young (ish) ambitious and are willing to work like a slave, crack on and buy the land, however first, an hour with a good accountant would be money well spent.
You're not going back to scratch, you're turning cattle into land, the only negative is the cattle are the operational cash generator, the land is for the balance sheet and long-term, but will of course allow you to expand further over time.
You can look forward to repeating the exercise in future without selling all you're assets to fund expansion, good luck.
Land next door rarely crops up for sale, so if the chance comes your way, of course it can throw a spanner in the business plan and make you re-think a way forward.
If you're young (ish) ambitious and are willing to work like a slave, crack on and buy the land, however first, an hour with a good accountant would be money well spent.
You're not going back to scratch, you're turning cattle into land, the only negative is the cattle are the operational cash generator, the land is for the balance sheet and long-term, but will of course allow you to expand further over time.
You can look forward to repeating the exercise in future without selling all you're assets to fund expansion, good luck.
- Tags
- round bales
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