What is Entrepreneur Relief? Catherine McGovern, tax director, explains.
Q. I’ve heard a lot about a new relief for business owners? What is Entrepreneur Relief and what are the conditions?
A. At the moment, a reduced rate of Capital Gains Tax of 20% applies on the disposal of certain qualifying business assets (e.g. shares in a trading company).
There’s an overall lifetime limit of €1 million; the standard rate of CGT (currently 33%) applies on anything over this.
The new Entrepreneur Relief applies to gains on disposals of chargeable business assets on or after 1 January 2016.
There are conditions to be satisfied to avail of 20% rate which include ownership and full-time working time tests.
The relief will not apply in respect of disposals of shares, securities or other assets held as investments and development land.
This ThinkBusiness advice clinic is in association with PKF O’Connor, Leddy & Holmes.