How we’ve been supporting our clients, Arbuckle Poultry Ltd

Category: AgricultureCOVID-19Taxation - Posted On: Jul 7 2020

At EQ, along with helping our clients access relevant funding and support, we have continued to provide our usual in-depth tax and business advice, delivering a variety of complex work to ensure our clients flourish.

One of those clients is Arbuckle Poultry Ltd, a family run farming business that sits on the boundary between Angus, Tayside and Perthshire. Although the family farm has been in operation for over 70 years, Arbuckle Poultry is a standalone free-range egg business. They have recently doubled the size of their operation from 32,000 to 64,000 laying hens across 3 sheds and sell their eggs to Noble Foods, a leading supplier of fresh food brands to major retailers and consumers.

The Arbuckle family have been clients for a number of years and have a close working relationship with Partner, Scott Greig and the rest of their engagement team. The business was initially owned by two Arbuckle families, and it became increasingly clear that to move the business forward and allow each family to focus on their own areas of expertise, the company would benefit if solely owned by the elder brother, John, and his family. John’s son Michael has been at the forefront of the business and led to its expansion from 16,000 laying hens in 2015 to 64,000 in 2019.

Scott Greig, Partner in our Cupar office, commented,

“When discussions started regarding Peter and his family leaving the business, we reviewed all of the tax implications with both families. We explained that the most tax efficient strategy would be that the company would undertake a share buyback, where the company buys back the shares for an agreed sum and they are then cancelled.”

Both families agreed to the share buyback, not only allowing the younger generation to take control of the business to push it forward but also helping with future succession. To proceed, Scott had to write to HMRC for clearance and explain the commercial circumstances behind the decision. Once the clearance had been given, he was then able to secure a 10% tax rate for the selling shareholders to minimise the overall tax cost after agreeing a value per share between the families.

Throughout the process, Scott maintained open discussions with their bank in order to secure the funding the company needed to pay-out to the exiting shareholders. When granted, the funding was given at a competitive rate resulting in a fair outcome for all parties involved.

Scott added,

“It was crucial for us to ensure that both families benefited from the share buyback process and that we were able to provide a tax efficient solution for Peter and his family to exit the business and focus on their own business goals. It’s been great to see this completed, especially during an uncertain time for many and I know the business will continue to thrive in the capable hands of John, Michael and family.”

Michael Arbuckle, commented,

“Scott has been integral to the continued success of our business, he took the time to explain the process from start to finish along with the benefits it would bring. The share buyback was the best outcome for both families, and for the business, and I look forward to working together with Scott and the team at EQ in the future.”

If you have any queries regarding your farming business, please contact a member of our EQ Agriculture team via or call 01307 474274 / 01334 654044.

Alternatively, if you would like more information on any tax related issues, please contact our EQ Taxperts.