From 1 January 2017 gains made by a relevant individual on the disposal of chargeable business assets are subject to a 10% rate of CGT provided that certain conditions are met. The relief is limited to lifetime gains of €1m.
Typical Problems that we come across
An individual might plan to dispose of business assets but does not meet all of the conditions required to make a claim for the 10% rate of tax.
For example, in order to claim the relief, the individual must have owned the chargeable business assets for a period of at least 3 years in the 5 years immediately prior to the disposal of those assets. If the chargeable business assets comprise shares in a company then the individual must hold at least 5% of the ordinary share capital and the individual must be a director or employee of a company who is or was required to spend not less than 50% of his /her working time in the service of the company in a managerial or technical capacity and has served in that capacity for a period of 3 years of the 5 years immediately prior to the disposal of the chargeable business assets of which the disposal of the shares in the company forms the whole or part.
Without careful planning to meet the conditions for the relief the benefit of the 10% rate could be lost.
How We Can Help
Our team of tax experts have an in-depth understanding of the legislation on Entrepreneur Relief. We can guide you through the legislation and help you to ensure that you take steps to satisfy the conditions in order to make a successful claim for the relief.