Retirement Relief + Entrepreneurial Relief??

54and56

Hi all,

Can someone please explain how Retirement Relief and Entrepreneurial Relief interact should a 60 year old business owner (who qualifies for Retirement Relief) sell his business and have a net gain for CGT purposes of €2m.

Would the first €750,000 be exempt under Retirement Relief, the next €1,000,000 be subject to CGT at the Entrepreneurial Relief rate of 10% and the balancing €250,000 at the normal 33% rate of CGT leaving him with a tax bill of €182,000 being €0 under Retirement Relief, €100,000 under Entrepreneurial Relief and €82,500 standard CGT?

Am I correct or (as I suspect) is it not possible to utilise both Retirement and Entrepreneurial Reliefs like this?

Heisenburg81

Je_suis_Jean wrote: »

Hi all,

Can someone please explain how Retirement Relief and Entrepreneurial Relief interact should a 60 year old business owner (who qualifies for Retirement Relief) sell his business and have a net gain for CGT purposes of €2m.

Would the first €750,000 be exempt under Retirement Relief, the next €1,000,000 be subject to CGT at the Entrepreneurial Relief rate of 10% and the balancing €250,000 at the normal 33% rate of CGT leaving him with a tax bill of €182,000 being €0 under Retirement Relief, €100,000 under Entrepreneurial Relief and €82,500 standard CGT?

Am I correct or (as I suspect) is it not possible to utilise both Retirement and Entrepreneurial Reliefs like this?

http://www.mazars.ie/Home/News/Publications/Articles/Revised-entrepreneur-relief-s35-Finance-Act-2015

dogsears

And remember that retirement relief is not based on the amount gain, but the amount of proceeds - this makes a difference where there's a deductible base cost. An entrepreneur might not i.e. they might have set up the company with a negligible cost i.e. 100 Euro, but it should not be assumed in any case. Also you may need to revise how retirement relief works when the amount received exceeds 750K - the excess is not taxed at 33%, the entire gain is taxed at 33% subject to marginal relief which limits the tax to no more than 50% of the excess of the consideration over 750k.

ixus

Is a termination payment possible? Once off contribution to a pension for this and last year?