This farm business fact sheet provides a guide to understanding the key financial factors impacting on the transfer of a viable farm business to the next generation.

Key points

• Farm generational transition can start well before the older generation is ready to retire. Commence with the transfer of management responsibility. Asset transfer should be the final focus.
• Financial security in retirement for the parents is the first and most important objective.
• Generations farming together and sharing business profits and access to land can be an important interim step.
• If both generations are farming together during the transition the profit allocation can recognise the contribution and needs of each generation to allow independent financial growth.
• Transitioning a viable business to the next generation is the next step. For broadacre farms, business scale sufficient to achieve farm income of $500,000 per on-farm family is a starting point to determine business viability.
• Business health check guidelines can help to determine what business income, costs, debt and assets are required for a viable transition to the next generation.

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