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Easier
handling of available funds
-
If used
as a way to build up a complementary herd renting is an
excellent solution to fulfil the quota without recourse to new
loans
-
Is equivalent to a 90 %
financing
-
The usual middle term credit
facilities require a down payment of 20 %
-
For renting, the entrance fees (security guarantee) amounts to
10 % of the rented capital. It is wiser to use several
financings in view of building up livestock
Quick
solution
- Prompt survey of
submitted files
Easy
method of use
- This formula
simplifies analytical accounts and the cost calculations
Flexibility
to adapt to changing situations
- According to his
situation at year ending, the breeder may choose how to pay
his dues to GESTEL : in kind, or cash
- The breeder may, little by little at his own speed, become
the owner of the herd, if cash available permits purchase of
animals
- To facilitate the handing over to his children, the breeder
may increase the rented part of the herd, and thus reduce the
inheritance fees. The children shall gradually become owners
Flexibility
for action
- Renting makes
possible a fast building up of a herd, in order not to loose
the quota after a temporary production drop
- Renting allows to face quickly the situation in case of a
new quota
- Reduction of production costs thanks to the quick arrival of
animals who can produce milk immediately
- No important capital required
- Increased value of the herd
- Costs of renting are completely deductible, reducing the
basis of social charges for taxation purpose. Example : for
100 FF of renting costs, the real expense becomes : 100 -
29,37 % i.e. 70,63 FF
Fiscal
advantage
- Costs of renting may
be deducted from the basis of tax calculation
Better
economical results
- In case of
price rise, no taxation (betterment tax) on the variations of
stock values for animals rented (theoretical profit without
influence on running accounts)
- In case of price reduction, no loss on rented herd
- Loans appear in the liabilities, but not the value of rented
animals. Raising loans is made easier
Increase
of the working capital
- The working capital
represents the permanent capital less the fixed assets
- The rented herd is not included in the fixed assets
- The arguments listed above point to the necessity to
contemplate a decision of renting animals in 3 circumstances
listed here after :
A ) The
breeder is considering
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- To try and obtain a quota
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- To invest in a branch outside the
dairy business, without increasing his total outstanding
credits
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B) The breeder is considering a new split of his assets
C) In case of inheritance or handing over his farm to his wife
or to his children, the choice of renting shall reduce the
transfer and estate duties. A rented herd is not taken into
account in the basis of taxation
Renting : the "plus" of the
winning breeder
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