Important changes to retirement relief for disposals after 31 December 2013

A relief from capital gains tax (known as retirement relief) can be available to an individual on the disposal of certain qualifying assets. Qualifying assets include shares in a family trading company or certain business assets.

The individual must be aged at least 55 years but does not need to actually retire.

 

Disposals to third parties

Retirement relief is currently available where proceeds do not exceed €750,000 and the disposal to a third party occurs on or before 31 December 2013.

Where the disposal to a third party takes place after 31 December 2013 the following are the relevant figures:

Aged 55-65          €750,000

Aged 66+             €500,000

 

Disposals to children

There is currently no limit on the market value of assets qualifying for retirement relief that can be disposed of to a child. All disposals to children must be treated as made at market value.

With effect from 1 January 2014 a €3 million ceiling will apply where the individual disposing of the asset is aged 66 years or over. There will be no relief for amounts in excess of €3 million.

 

Next steps

For an individual contemplating the disposal of shares in a family trading company/business assets/ farming assets a short window of opportunity remains between now and 31 December 2013 to avail of the existing limits of €750,000 (third party disposals) and the uncapped relief (disposals to children). Disposals after that date by individuals over 66 years of age will be subject to the new limits.

 

Contact Mark Butler or Maura Duffy of this office for more information.

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