Retirement / Succession Planning

The main tax reliefs to be considered when business owners are planning for retirement or succession include the following:

  1. Capital Gains Tax
    1. Retirement Relief – there are several conditions to consider.  The main conditions to consider for example include age (claimant must be 55 years old or older); must own assets for 10 years prior to retirement;  must be mainly trading (investments excluded); working director condition to be met; claimant ownership test must be met.
    2. Entrepreneur Relief – subject to meeting all the conditions, the CGT rate is reduced to 10% for the first €1m of gain.
  2. Capital Acquisitions Tax – Business Relief available where transferring the business to children (for example, as a gift).  This relief can reduce the value of the gift by 90% however there are conditions which must be met to qualify for the relief.
  3. Buy back of shares where available (refer to Section 130, TCA 1997 and company law).  Conditions exist to avail of the share buyback.
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