Thursday, 17 May 2012 16:27

Advantages in leasing out stock?

Written by 

OWNERS OF capital stock are being encouraged to lease out herds or flocks before values fall.

Heartland Building Society's head of rural, Will Purvis, says it's inevitable falling export returns will in the medium term be reflected in lower capital stock values. Leasing now before values fall further will release more capital and maximise tax deductability, he argues.

"It's about releasing the capital you have tied up for other things," he told Rural News. "You may argue that's just transferring one form of debt for another but we're convinced there are tax advantages."

Dairy cow prices have already fallen from over $2000 before Christmas to $1800 and if current commodity trends continue they could be lower still in six months, he reasons.

"Realising the current peak capital values for livestock and leveraging them using smart financing options now will make a big difference to future cash flows and farm profitability."

Lease terms can be tailored to client needs and situations. Changes to livestock taxation schemes may also impact financing options, he notes.

"We believe Heartland Livestock Leasing adds a viable alternative to traditional ways of financing future growth of a farming business."

More like this

Featured

National

Machinery & Products

» Latest Print Issues Online

The Hound

Overbearing?

OPINION: Dust ups between rural media and PR types aren't unheard of but also aren't common, given part of the…

Foot-in-mouth

OPINION: The Hound hears from his canine pals in Southland that an individual's derogatory remarks on social media have left…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter