An individual may claim relief from capital gains tax (CGT) in respect of a chargeable gain arising on the disposal of qualifying business assets.
There is a lifetime limit of €1 million on the gains made on or after 1 January 2016 that you can claim relief on. If you can claim this relief, you will pay CGT at the rate of 10% on gains on the disposal of the business assets. This is reduced from the normal rate of 33%.
The qualifying business assets must have been owned by that individual for a continuous period of 3 years in the 5 years immediately prior to the disposal of the assets. Where a business is carried on by a limited company, individuals seeking to qualify for the relief must own not less than 5% of the ordinary shares in the qualifying company or 5% of the ordinary shares in a holding company of a qualifying group.
The individual must have been a director or employee of the qualifying company and must have spent not less than 50% of his or her time in the service of the company in a managerial or technical capacity for a continuous period of 3 years in the 5 years immediately prior to the disposal of the chargeable business assets.
Subject to the conditions of the relief being met, the relief can be granted in the following scenarios:
- Share buybacks
- Company liquidations
- Partnership assets
If you require further information regarding the qualifying conditions please contact Larry or Martin.