Entrepreneur relief
Entrepreneur Relief
This relief gives a CGT rate of 10% on gains from the sale of qualifying business assets. This is reduced from the normal rate of 33%.
There is a lifetime limit of €1 million on the gains that you can claim relief on. Only gains on disposals made on or after 1 January 2016 are counted in the limit.
The relief does not apply to disposals of:
- shares (other than shares that qualify for relief under this section), securities or other assets held as investments
- development land
- assets on the disposal of which no chargeable gain would arise
- assets personally owned outside a company, even where such assets are used by the company
- goodwill which is disposed of to a connected company
- shares or securities in a company where the individual remains connected with the company following the disposal.
How do you qualify for the relief?
You must have owned the business assets for a continuous period of three years. The three years must be in the five years immediately prior to the disposal. The business asset must be used for a qualifying business.
Qualifying business assets
Qualifying business assets are:
- shares held by an individual in a trading company
- owned by a sole trader and used in their trade.
Qualifying business operated by a company
Where a business is operated by a company you must have owned at least 5% of the ordinary shares in either:
- the company
- a holding company of a qualifying group.
This means that the relief would not apply where:
- there is a dormant company in a group
- one of the subsidiaries is not a trading company.
Subject to qualifying conditions and criteria
Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie