Taxes Consolidation Act 1997 section 597A

Entrepreneur relief

Section 597A provides the first version of entrepreneur relief, giving a tax credit against capital gains tax to individuals who reinvest disposal proceeds in new business ventures (this relief has since been revised by section 597AA).

• An individual who sold assets on or after 1 January 2010 and paid CGT may claim a tax credit where the after-tax proceeds are reinvested (minimum €10,000) in chargeable business assets between 1 January 2014 and 31 December 2018.
• The credit, available on disposal of the new assets after a minimum three-year holding period, equals the lower of the CGT paid on the original disposal (or a proportionate amount where only part of the proceeds is reinvested) and 50 per cent of the CGT due on the subsequent disposal.
• The relief can be carried forward through successive reinvestments in further new businesses, provided each reinvestment is made on or before 31 December 2018 and the three-year holding requirement is met each time.
• Where chargeable business assets are transferred to a wholly owned company for bona fide commercial reasons before sale, the relief applies to the disposal of the shares in that company as if the assets had been sold directly, but not where the arrangement is designed to secure a tax advantage.