Given the recent experiences, some dairy farmers are having issues with suppliers. I thought it was vital that I brought up the forgotten value of Genus shares and the significance it could have on a business’s cash flow.
Genus shares have sat on many farming business balance sheets at their original nominal cost since the 1990s, and in some cases been omitted and completely forgotten about. These shares now have some substantial value.
On the day of writing this article, Genus shares have a market value of £32 per share. This means a farming business that was issued 1,000 shares, could effectively be sat on £32K.
In times of milk demand reduction and therefore milk cheque reduction, the sale of your genus shares could provide a month or two of breathing space for your business.
A sale of these shares would give rise to a capital gains tax disposal, therefore advice should be taken before sale to ensure you make the maximum use of potential losses and annual exemptions.