Quota Questions and answers

Ian Potter Associates

Mastermind - your quota and entitlement questions answered.

If you have a specific question about quota or entitlements you would like answered then email ianpotter@ipaquotas.co.uk and he will do his best to answer the query within 24 hours. Ian Potter Associates reserves the right to put the question and the answer on this page of the website. Confidentiality will be guaranteed.

All views expressed on this website are those of Ian Potter Associates only and you must not copy, distribute or take any action in reliance upon them. The information is provided in good faith but does not provide any warranties whatsoever nor assume any legal liability or responsibility for the accuracy, completeness or usefulness of any information supplied.

Q - I have made a capital gain this year. Is there any way I can reduce or eliminate my tax bill?

Potentially yes, if you have milk quota you have purchased it is almost certain to stand you at a higher cost than the current market value. Also remember a capital loss can be carried forward in your accounts indefinitely. This is the reason, at current low quota prices, numerous farmers are selling their milk quota and buying back to create a loss. Call the office and speak to Joanne for further information.

Q – I’m changing from a Partnership to a Limited Company can I just transfer the milk quota across?

No our advise is to sell the milk quota from the partnership to a separate producer and for the Limited Company then to also buy quota from a third party. If you are not seen to transfer the quota separately it is likely the revenue will treat them as connected transfers. If you are looking to transfer quota in this way we can involve you in a quota merry go round hence avoiding the open market. Call the office and speak to Joanne for further information.

Q - I am a milk producer, temporarily unable to produce at present, but would like to purchase milk quota at present prices. Is this possible?

Yes, but you will need to make sure that you resume milk production within 6 months. Under exceptional circumstances the six month period can be flexible.

Q - I am a tenant farmer who has ceased milk production. Does my landlord have me over a barrel?

It very much depends on the terms of the tenancy agreement. We suggest both enter into negotiation. Also see below concerning Trust Arrangements.

Q – I am a non producer but do not want to sell my milk quota at todays low price. Do I have any other options to selling?

I ceased milk production in the last quota year and have not delivered any milk in the current quota year so to avoid confiscation must I sell the quota by 31^st March.

You can transfer part or all of your milk quota to another active producer. If this is done via what is known as a bare Trust you can continue to lease out part or all of your milk quota each year until you decide to sell it. If drawn up correctly the transfer should not be deemed a sale of your quota so far as the Revenue are concerned. Note in the UK only a solicitor can legally draw up a Trust Agreement.

For further details on how Trust Agreements operate contact Joanne.

Q - What happens with regards to calculating a producer's super levy in a leap year?

Your milk purchaser will add production together for February and March and divide by 60 to give average daily production. Then one day will be deducted for quota purposes. The EU does not recognise a leap year as far as levy calculation is concerned.

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