Update To Include Change To Entrepreneur Relief Contained In Finance Bill 2020
Thinking of Selling your Business? Talk to an expert in Cooney Carey about the possible application of Entrepreneur Relief. What is Entrepreneur Relief? Put simply it is a relief from the standard Capital Gains Tax (CGT) rate that would apply on the sale of a business. As highlighted below it applies to individuals disposing of certain business assets. Nature of the relief The relief provides that a 10% rate of CGT applies in respect of chargeable gains on disposals or part disposals of qualifying business assets, up to a lifetime limit of €1 million. This provides for a maximum tax saving of €230,000 when one compares the position to the CGT that would otherwise arise at the current rate of 33%. Availability of the relief – Chargeable Business Assets The reduced rate of CGT applies to disposals of “chargeable business assets”. This includes:
- shares held by an individual in a trading company; and
- assets owned by a sole trader and used in their trade.
- the holding of shares, securities or other assets held as investments;
- the holding of development land or letting of land; and
- assets owned personally, outside the company, even where such assets are used by the company.