AITI Chartered Tax Adviser
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Entrepreneur relief – how do I qualify?

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TCA 1997 s 597AA provides that a chargeable gain from disposal of chargeable business assets is subject to CGT at 10%.

Tip
1. Unlike retirement relief (which provides exemption where sales proceeds do not exceed €750,000), entrepreneur relief applies where the chargeable gain does not exceed €1,000,000.
2. The assets must have been held continuously for not less than 3 years in the 5 year period immediately prior to the disposal of the assets.
3. Applies to shares, including shares in a holding company.
4. If a disposal also qualifies for retirement relief, the higher relief applies.
5. Applies to liquidation proceeds.
6. Applies to share buybacks.

Traps
1. Does not apply to investment assets, holding of development land, or development/letting of land.
2. Each individual has a lifetime limit of €1,000,000.
3. A shareholder must also have spent more than half his time working continuously for not less than 3 years in the 5 year period immediately prior to the disposal of the assets.
4. Relief does not apply to shareholdings below 5%.



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