Business Relief

Q. I am thinking of gifting my business to my daughter but I am concerned that she will be hit with a large Capital Acquisitions Tax (Gift Tax) bill. Are there any reliefs available?  

18th August 2017

A. As your daughter is receiving a gift of business property, she may qualify for Business Relief. This reduces the taxable value of the business property on which Capital Acquisitions Tax (CAT) is calculated by 90%.

Example: If your business was valued at €400,000 then the taxable value of this gift could be reduced to €40,000 with Business Relief once all relevant conditions were met.

Whether or not the business assets/property being transferred qualifies for the relief is subject to strict criteria and careful consideration should be given before the relief is claimed.

A business is any activity, trade, profession or vocation which generates income or profits over time.

The person making the gift must have owned the relevant business property for a period of at least five years.

The relief can be withdrawn or partially taken back if:

  • the business stopped trading within the six years of the gift
  • the relevant business property is sold, redeemed or acquired by the state within six years of the gift or inheritance. If this property is replaced within one year, the relief will not be withdrawn.
  • you dispose of development land which qualified for business relief between six and ten years after the date of the gift.

Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Call us today to make an appointment at your local office

1890 98 76 09

Or submit an enquiry

Call us today to make an appointment at your local office

1890 98 76 09

Or submit an enquiry