{"id":10865,"date":"2022-04-16T12:25:50","date_gmt":"2022-04-16T12:25:50","guid":{"rendered":"http:\/\/legalblog.ie\/?p=10865"},"modified":"2024-03-31T21:58:55","modified_gmt":"2024-03-31T21:58:55","slug":"entrepreneurs-relief","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/entrepreneurs-relief\/","title":{"rendered":"Entrepreneurs Relief"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Qualifying_Individuals\" title=\"Qualifying Individuals\">Qualifying Individuals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Qualifying_Individual\" title=\"Qualifying Individual\">Qualifying Individual<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Qualifying_Business\" title=\"Qualifying Business\">Qualifying Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Reduced_Rate\" title=\"Reduced Rate\">Reduced Rate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Exceptions\" title=\"Exceptions\">Exceptions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Reinvestment_Relief\" title=\"Reinvestment Relief\">Reinvestment Relief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Company_Conditions\" title=\"Company Conditions\">Company Conditions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/#Tax_Credit\" title=\"Tax Credit\">Tax Credit<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/2\/#TAXES_CONSOLIDATION_ACT\" title=\"TAXES CONSOLIDATION ACT\">TAXES CONSOLIDATION ACT<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/2\/#Entrepreneur_relief\" title=\"Entrepreneur relief.\">Entrepreneur relief.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/entrepreneurs-relief\/2\/#Revised_entrepreneur_relief\" title=\"Revised entrepreneur relief\">Revised entrepreneur relief<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_Individuals\"><\/span>Qualifying Individuals<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is a reduced rate of capital gains tax on disposal of chargeable business assets or shares by a qualifying individual. The purpose is to incentivise entrepreneurs.<\/p>\n<p>Entrepreneurs relief provides a reduced capital gains tax of 10% applicable to disposals made after 2016.there is a lifetime limit of \u20ac1 million per person. All disposals after 1 January 2016 are taken into account for the purpose of this \u20ac1 million limit.<\/p>\n<p>Chargeable business assets include assets (and goodwill) used for the purpose of a qualifying business carried on by the individual. They include or ordinary shares in a company carrying on a qualifying business or in a holding company of a qualifying group.<\/p>\n<p>The individual selling the shares must own 5% or more of the ordinary share capital in the company being sold and must be a qualifying person in respect of the company or a member of its group.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_Individual\"><\/span>Qualifying Individual<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A qualifying\u00a0 individual in this context is one who has beneficially owned the business assets for at least three years before disposal. Where they are acquired in a reconstruction or amalgamation, the period of ownership of the earlier shares is taken into account. The period of employment or director with the previous company is taken into account for those purposes.<\/p>\n<p>A qualifying person is an individual<\/p>\n<ul>\n<li>who is or has been a director or employee of a company or companies in a qualifying group<\/li>\n<li>who is or was required to spend 50% or more of his working time in the service of that company or companies in a managerial or technical capacity,<\/li>\n<li>has done so for a continuous period of three of the previous five years immediately preceding the disposal.<\/li>\n<\/ul>\n<p>Working time is time that the employee or director is at the place of work or at their employer&#8217;s disposal carrying on or performing the activities or duties of their work. There are no continuity provisions where a sole trader or partnership incorporates.<\/p>\n<p>The requirement\u00a0 that the individual has owned a holding of at least 5% of the ordinary share capital for a continuous period of 3 years in the 5 years immediately prior to the disposal was amended in 2020. The shares can qualify for relief if they were held for a continuous period of 3 years at any time prior to the disposal of those shares. This applies to disposals of chargeable business assets made on or after 1 January 2021.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_Business\"><\/span>Qualifying Business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A qualifying business is a business other than<\/p>\n<ul>\n<li>the holding of securities or other assets as investment,<\/li>\n<li>the holding of development land or the development of or letting of land.<\/li>\n<\/ul>\n<p>A qualifying group is a holding company and one or more 50%+ subsidiaries providing that the holding for each 50%+ subsidiary other than the holding company wholly or mainly carries out a qualifying business.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reduced_Rate\"><\/span>Reduced Rate<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The relief provides a reduced rate of 20% applicable to the gain on the disposal by the individual of the chargeable business assets (whether shares or business assets).<\/p>\n<p>There is a lifetime limit of \u20ac1 million of such gains, after 1 January 2016. The higher rate capital gains tax applies on the excess over \u20ac1 million.<\/p>\n<p>The rate is 10% after 1 January 2017. It had formerly been 20%.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Exceptions\"><\/span>Exceptions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The relief does not apply to disposals of:<\/p>\n<ul>\n<li>shares (other than shares that qualify for relief under this section), securities or other assets held as investments<\/li>\n<li>development land<\/li>\n<li>assets on the disposal of which no chargeable gain would arise<\/li>\n<li>assets personally owned outside a company, even where such assets are\u00a0used by the company<\/li>\n<li>goodwill which is disposed of to a connected company<\/li>\n<li>shares or securities in a company where the individual remains connected with the company following the disposal.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Reinvestment_Relief\"><\/span>Reinvestment Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is relief which to encourage entrepreneurs who have disposed of assets after 2010 to reinvest all or part of the consideration in the new productive trade up to the end of 2018.\u00a0 Where the individual disposes of his or her\u00a0 investment after a three-year period, capital gains tax on the disposal is reduced by the lower of the capital gains tax on the previous disposal or 50% of the tax due on the new disposal.<\/p>\n<p>A chargeable business asset is<\/p>\n<ul>\n<li>an asset including goodwill where the assets is acquired for less than at least \u20ac10,000 on or after 1 January 2014 and before the end of 2018 and which has an interest in or is an asset used wholly for the purpose of new business carried on by a qualifying enterprise or<\/li>\n<li>is a holding of new shares issued after 2014 in a qualifying company carrying on a new business or a holding company of a company not listed, which owns 100% of the ordinary share capital of a qualifying company, of which the individual owns not less than 15% of the ordinary share capital of the qualifying company and is a full-time working director of the qualifying company other than an asset of the disposal of which no gain would be chargeable.\u00a0 Shares other than the above securities or other assets which are held for investment do not qualify.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Company_Conditions\"><\/span>Company Conditions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A qualifying company is one that is a qualifying enterprise.\u00a0 This is an enterprise, which at the time of making the initial risk finance investment is a micro, small or medium sized enterprise and which has been carrying on any business, trade or profession for less than seven years and which at the time of the initial risk finance investment is not a listed company.<\/p>\n<p>The new business for the purpose of entrepreneur relief means relevant trading activities carried on by a qualifying enterprise that was not carried on, prior to 1 January 2014 by the enterprise or any person connected with it.\u00a0 It does not include any relevant trading activities, the products, goods or services which are substantially the same as products, goods or services previously provided by an individual claiming relief by any person connected with such individual.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Credit\"><\/span>Tax Credit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where a person, who after 1 January 2010 has made a disposal of an asset on which capital gains have been paid and who between 2014 and 2019 applies and the amount the equal to all or part of the consideration as an initial risk investment in acquiring charge of a business assets, is entitled to a tax credit against any capital gains tax liability, arising on a subsequent disposal of the interest in those shares made within three years.<\/p>\n<p>The tax credit is the lower of the capital gains tax paid on the disposal of the first asset times the total consideration applied towards the second asset as a proportion of the total consideration for the sale of the first asset and 50% of the capital gains on the disposal of a second asset, if lower.<\/p>\n<p>Where for bona fide commercial reasons a person who makes a disposal or transfers that asset to a wholly owned company before the sale, the tax credit continues to be available.\u00a0 It must not be an arrangement the main purpose or one of the main purposes of which is to secure a tax advantage.<\/p>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>&nbsp;<\/p>\n<p>597A.<\/p>\n<h4>Entrepreneur relief.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;chargeable business asset&#8217; means an asset, including goodwill but not including shares (other than shares mentioned in paragraph (b)), securities or other assets held as investments, where that asset is acquired at a cost of not less than \u20ac10,000 on or after 1 January 2014 but on or before 31 December 2018 and which &#8211;<\/p>\n<p>(a)is, or is an interest in, an asset used wholly for the purposes of a new business carried on by a qualifying enterprise, or<\/p>\n<p>(b)is a holding of new ordinary shares, issued on or after 1 January 2014 &#8211;<\/p>\n<p>(i)in a qualifying company carrying on new business, or<\/p>\n<p>(ii)in a holding company which owns 100 per cent of the ordinary share capital of a qualifying company carrying on new business,<\/p>\n<p>of which an individual claiming relief under this section &#8211;<\/p>\n<p>(I)owns not less than 15 per cent of the ordinary share capital of the qualifying company or the holding company, and<\/p>\n<p>(II)is a full-time working director of the qualifying company,<\/p>\n<p>other than an asset on the disposal of which no gain accruing would be a chargeable gain;<\/p>\n<p>&#8216;full-time working director&#8217;, in relation to a qualifying company, means a director required to devote substantially the whole of his or her time to the service of the company in a managerial or technical capacity;<\/p>\n<p>&#8216;holding company&#8217; means a company that is not listed on the official list of any stock exchange whose business consists wholly of holding shares in a qualifying company;<\/p>\n<p>&#8216;initial risk finance investment&#8217; means the funding of the qualifying enterprise for the purpose of new business which funding &#8211;<\/p>\n<p>(a)must not exceed a total of \u20ac15 million,<\/p>\n<p>(b)is provided in full within 6 months of the commencement of the new business, and<\/p>\n<p>(c)includes equity or investment or both;<\/p>\n<p>&#8216;new business&#8217; means relevant trading activities carried on &#8211;<\/p>\n<p>(a)by a qualifying enterprise (to which paragraph (a) of the definition of &#8216;qualifying enterprise&#8217; applies) that were not, prior to 1 January 2014, carried on by that qualifying enterprise or by any person connected (within the meaning of section 10) with that qualifying enterprise, or<\/p>\n<p>(b)by a qualifying enterprise (to which paragraph (b) of the definition of &#8216;qualifying enterprise&#8217; applies) that were not, prior to 1 January 2014, carried on by that qualifying enterprise or by any person connected (within the meaning of section 10) with that qualifying enterprise,<\/p>\n<p>but shall not include any relevant trading activities the products, goods or services of which are substantially the same as products, goods or services previously provided by any individual claiming relief under this section or by any person connected with that individual;<\/p>\n<p>&#8216;qualifying company&#8217; is a company that is a qualifying enterprise and which, at the time of the making of the initial risk finance investment, is not listed on the official list of any stock exchange;<\/p>\n<p>&#8216;qualifying enterprise&#8217; means an enterprise which, at the time of the making of the initial risk finance investment, is a micro, small or medium-sized enterprise, as defined in Article 2 of the Annex to Commission Recommendation 2003\/361\/EC of 6 May 2003 and which &#8211;<\/p>\n<p>(a)has not been carrying on any business, trade or profession, or<\/p>\n<p>(b)has been carrying on a business, trade or profession for less than 7 years;<\/p>\n<p>&#8216;relevant trading activities&#8217; has the same meaning as it has in section 489 and includes farming (within the meaning of section 654).<\/p>\n<p>(2)An individual who &#8211;<\/p>\n<p>(a)on or after 1 January 2010, has made a disposal of an asset on which capital gains tax has been paid, and<\/p>\n<p>(b)on or after 1 January 2014 but on or before 31 December 2018, applies an amount equal to all or part of the consideration received on that disposal (after deducting any capital gains tax paid on that disposal) as an initial risk finance investment in acquiring chargeable business assets,<\/p>\n<p>shall be entitled to a tax credit against capital gains tax liability arising on a subsequent disposal of, or of an interest in, those chargeable business assets made more than 3 years after they were acquired, in an amount equal to the lower of &#8211;<\/p>\n<p>(i)that part of the capital gains tax paid on the disposal of the first- mentioned asset in the proportion that the amount applied as an initial risk finance investment bears to the consideration received on the first-mentioned disposal (after deducting any capital gains tax paid), and<\/p>\n<p>(ii)50 per cent of the capital gains tax payable on the disposal of the chargeable business asset.<\/p>\n<p>(3)Where on a subsequent disposal of the chargeable business assets referred to in subsection (2), an amount equal to all or part of the consideration (after deducting any capital gains tax paid on that disposal) applied as initial risk finance investment is, in turn, applied as an initial risk finance investment on or after 1 January 2014 but on or before 31 December 2018, in acquiring other chargeable business assets (in this subsection referred to as &#8216;the new chargeable business assets&#8217;), the individual shall similarly be entitled to a tax credit against capital gains tax liability arising on a subsequent disposal of, or of an interest in, those new chargeable business assets made more than 3 years after they were acquired, in an amount equal to the lower of &#8211;<\/p>\n<p>(a)that part of the capital gains tax paid on the disposal of the first- mentioned chargeable business asset in the proportion that the amount applied as an initial risk finance investment bears to the consideration received on that disposal (after deducting any capital gains tax paid), and<\/p>\n<p>(b)50 per cent of the capital gains tax payable on the disposal of the new chargeable business asset.<\/p>\n<p>(4)Where for bona fide commercial reasons, a person making a disposal of a chargeable business asset first transfers that asset to a wholly owned company followed immediately by the disposal of the shares in that company to the person making the acquisition, the tax credit under subsection (2) or (3), as appropriate, shall apply to the disposal of the shares in the company to which the chargeable business asset was transferred as it would have applied if the chargeable business asset had been disposed of directly to the person making the acquisition.<\/p>\n<p>(5)Subsection (4) shall not apply where the transfer of the chargeable business asset to a wholly owned company is an arrangement or part of an arrangement the main purpose or one of the main purposes of which is to secure a tax advantage within the meaning of section 546A.<\/p>\n<p>(6)Subject to section 597AA(5) &#8211;<\/p>\n<p>(a)subsection (2) shall not apply where the subsequent disposal referred to in that subsection is made on or after 1 January 2016, and<\/p>\n<p>(b)subsection (3) shall not apply where the second-mentioned subsequent disposal in that subsection is made on or after 1 January 2016.<\/p>\n<p>597AA.<\/p>\n<h4>Revised entrepreneur relief<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8217;51 per cent subsidiary&#8217; has the same meaning as it has in section 9(1)(a);<\/p>\n<p>&#8216;development land&#8217; has the same meaning as it has in section 648;<\/p>\n<p>&#8216;group&#8217; means a holding company and all companies which are 51 per cent subsidiaries of the holding company;<\/p>\n<p>&#8216;holding company&#8217; means a company &#8211;<\/p>\n<p>(i)that holds shares in other companies, all of which are its 51 per cent subsidiaries, and<\/p>\n<p>(ii)whose business consists wholly or mainly of the holding of shares in the subsidiaries referred to in subparagraph (i);<\/p>\n<p>&#8216;qualifying business&#8217; means a business other than &#8211;<\/p>\n<p>(a)the holding of securities or other assets as investments,<\/p>\n<p>(b)the holding of development land, or<\/p>\n<p>(c)the development or letting of land;<\/p>\n<p>&#8216;qualifying group&#8217; means a group, the business of each 51 per cent subsidiary (other than a holding company) in which consists wholly or mainly of the carrying on of a qualifying business;<\/p>\n<p>&#8216;qualifying person&#8217; means an individual who is or has been a director or employee of a company (or companies in a qualifying group) who &#8211;<\/p>\n<p>(a)is or was required to spend not less than 50 per cent of that individual&#8217;s working time in the service of that company (or those companies) in a managerial or technical capacity, and<\/p>\n<p>(b)has served in that capacity for a continuous period of 3 years in the period of 5 years immediately prior to the disposal of the chargeable business assets of which the disposal of shares in the company (or one of those companies) forms the whole or part;<\/p>\n<p>&#8216;relevant company&#8217; means a company (including a company in a qualifying group) the disposal of shares in which forms the whole or part of the disposal of chargeable business assets;<\/p>\n<p>&#8216;relevant individual&#8217; means an individual &#8211;<\/p>\n<p>(a)who has been the beneficial owner of an asset or an interest in an asset to which subparagraph (i) of the definition of &#8216;chargeable business asset&#8217; in subsection (2)(a) applies for a continuous period of not less than 3 years in the 5 years immediately prior to the disposal of that asset, or<\/p>\n<p>(b)who has been the beneficial owner of a holding of ordinary shares to which subparagraph (ii) of the definition of &#8216;chargeable business asset&#8217; in subsection (2)(a) applies for a continuous period of not less than 3 years at any time prior to the disposal of those shares;<\/p>\n<p>&#8216;working time&#8217; means any time that an employee or director is &#8211;<\/p>\n<p>(a)at his or her place of work or, in the case of an employee, at his or her employer&#8217;s disposal, and<\/p>\n<p>(b)carrying on or performing the activities or duties of his or her work.<\/p>\n<p>(b)<\/p>\n<p>(i)For the purposes of the definition of &#8216;qualifying person&#8217; in paragraph (a), any period during which the individual was a director or employee of &#8211;<\/p>\n<p>(I)a company that was treated as being the same company, for the purposes of section 586, as a relevant company, or<\/p>\n<p>(II)a company involved in a scheme of reconstruction or amalgamation under section 587 with a relevant company,<\/p>\n<p>shall be taken into account in calculating the periods during which the individual was a director or employee.<\/p>\n<p>(ii)For the purposes of the definition of &#8216;relevant individual&#8217; in paragraph (a), any period during which the individual owned shares in &#8211;<\/p>\n<p>(I)a company that was treated as being the same company, for the purposes of section 586, as a relevant company, or<\/p>\n<p>(II)a company involved in a scheme of reconstruction or amalgamation under section 587 with a relevant company,<\/p>\n<p>shall be taken into account in calculating the periods during which the individual was a beneficial owner.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraph (b), &#8216;chargeable business asset&#8217; means an asset, including goodwill which &#8211;<\/p>\n<p>(i)is, or is an interest in, an asset used for the purposes of a qualifying business carried on by an individual, or<\/p>\n<p>(ii)is a holding of ordinary shares in &#8211;<\/p>\n<p>(I)a company whose business consists wholly or mainly of carrying on a qualifying business, or<\/p>\n<p>(II)a holding company of a qualifying group,<\/p>\n<p>in respect of which an individual &#8211;<\/p>\n<p>(A)has owned not less than 5 per cent of the ordinary shares for a continuous period of not less than 3 years at any time prior to the disposal of those shares, and<\/p>\n<p>(B)is a qualifying person in respect of the company or, if the company is a member of a qualifying group, of one or more companies which are members of the qualifying group.<\/p>\n<p>(b)&#8217;Chargeable business asset&#8217; does not include &#8211;<\/p>\n<p>(i)shares (other than shares mentioned in paragraph (a)(ii)), securities or other assets held as investments,<\/p>\n<p>(ii)development land,<\/p>\n<p>(iii)assets on the disposal of which no gains accruing would be chargeable gains,<\/p>\n<p>(iv)subject to subsection (8), goodwill which is disposed of directly or indirectly to a company, where, immediately following the disposal, the individual is connected with the company, or<\/p>\n<p>(v)subject to subsection (8), shares or securities in a company which are disposed of directly or indirectly to another company, where, immediately following the disposal, the individual is connected with the first-mentioned company.<\/p>\n<p>(3)Subject to subsection (4), the rate of capital gains tax chargeable on a chargeable gain or chargeable gains accruing in respect of a disposal or disposals of the whole or part of chargeable business assets made by a relevant individual shall be 10 per cent.<\/p>\n<p>(4)<\/p>\n<p>(a)The rate of capital gains tax referred to in subsection (3) shall be chargeable only on so much, if any, of the chargeable gain or chargeable gains accruing, when added to the aggregate amount of any chargeable gain or chargeable gains accruing in respect of any previous disposal of the whole or part of chargeable business assets made by the relevant individual in the lifetime of that individual on or after 1 January 2016, that does not exceed \u20ac1,000,000.<\/p>\n<p>(b)The rate of capital gains tax referred to in section 28(3) shall be chargeable on so much, if any, of the chargeable gain or chargeable gains accruing, when added to the aggregate amount of any chargeable gain or chargeable gains accruing in respect of any previous disposal of the whole or part of chargeable business assets made by the relevant individual in the lifetime of that individual on or after 1 January 2016, that exceeds \u20ac1,000,000.<\/p>\n<p>(5)This section shall not apply, and section 597A shall apply, to a disposal of the whole or part of chargeable business assets made by a relevant individual where the amount of capital gains tax payable in respect of the disposal under this section is greater than the amount of capital gains tax payable in respect of the disposal were section 597A to apply.<\/p>\n<p>(6)Subject to section 600 and subsection (8), this section shall not apply to such portion of the chargeable gain or gains accruing in respect of a disposal or disposals by a relevant individual of chargeable business assets which form part of a transfer to which section 600 applies as bears the same proportion to the total of such gains as the value of the consideration received by the relevant individual out of the assets of the company in respect of the transfer bears to the value of the consideration received by the relevant individual other than by way of shares or securities in respect of such transfer.<\/p>\n<p>(7)Where a relevant individual enters into arrangements, the main purpose, or one of the main purposes, of which is to secure that the relevant individual is not connected with a company for the purpose of either or both of subparagraphs (iv) or (v) of subsection (2)(b), this section shall not apply.<\/p>\n<p>(8)Subsections (2)(b)(iv), (2)(b)(v) and (6) shall not apply in relation to a disposal of assets where it would be reasonable to consider that the disposal is made for bona fide commercial reasons and does not form part of any arrangement or scheme the main purpose or one of the main purposes of which is the avoidance of liability to tax.<\/p>\n<p>&nbsp;<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10865\" data-postid=\"10865\" class=\"themify_builder_content themify_builder_content-10865 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Qualifying Individuals There is a reduced rate of capital gains tax on disposal of chargeable business assets or shares by a qualifying individual. The purpose is to incentivise entrepreneurs. Entrepreneurs relief provides a reduced capital gains tax of 10% applicable to disposals made after 2016.there is a lifetime limit of \u20ac1 million per person. All [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[421,420],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10865"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10865"}],"version-history":[{"count":8,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10865\/revisions"}],"predecessor-version":[{"id":34525,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10865\/revisions\/34525"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}