“Retirement” relief

This applies where a person aged 55 or more and disposes of a farm or business (“qualifying assets”), i.e., chargeable business assets – including shares in a family company that you have been held for 10 years or more.

If the disposal is to a child of the disponer the gain is exempt (s 599). From 1 January 2014, a lifetime limit of €3m applies if the disponer is aged 66 or over.

For other disposals the CGT is nil if the disposal proceeds do not exceed the lifetime limit of €750,000 (s 598). From 1 January 2014, the lifetime limit is reduced to €500,000 if the disponer is aged 66 or over.

If the proceeds exceed the lifetime limit, the CGT may not exceed half the difference between the proceeds and the lifetime limit.

A disposal of assets held by a family company owner may also qualify for relief provided they are disposed of at the same time and to the same person as the family company shares.

Let farm land can qualify if any of the following apply:

  • Having been farmed prior to letting it is let under the early retirement scheme.
  • It is compulsorily acquired and was land let for five years ending with the disposal.
  • The disposal is to a child and it was farmed prior to the letting.
  • It was let for not less than five years to the same person in the 25 year period ending with the disposal.

Retirement relief is subject to a “bona-fide commercial reasons” anti-avoidance test.

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