Advice for Solicitors: Retirement Relief

If you or any of your clients are over 55 and considering the sale of business assets, then Retirement Relief may be of interest to you.

Current Irish tax legislation, subject to certain conditions, allows individuals over 55 to dispose of their business, valued at up to €750,000/€500,000, tax free. This relief is known as retirement relief. In broad terms retirement relief is a relief given to an individual on the disposal of all or part of the qualifying assets of his business, this includes shares in a family company, provided he is aged fifty-five years or more at the date of disposal.

Retirement relief is a relief from CGT on the sale of business assets. Where a person who has attained 55 years of age disposes of the whole or part of his qualifying assets for a consideration which does not exceed €750,000/€500,000 relief is given for the full amount of the capital gains tax chargeable.

On a disposal to a child, there is no limit on the amount of the consideration (actual or deemed) unless the transferor is 66 or over. In such cases a limit of €3,000,000 will apply.

Retirement Relief is a very important concession that allows for the tax efficient transfer of business assets. In many instances it will allow for business assets to be transferred without any capital gains tax arising. That being said, it is important to ensure the relief is available and correctly applied to each individual circumstance.