Taxes Consolidation Act 1997 section 597AA

Revised entrepreneur relief

Section 597AA provides entrepreneur relief, which applies a reduced 10% capital gains tax rate to gains arising on the disposal of qualifying business assets by an individual, subject to a lifetime limit.

• A 10% CGT rate applies to gains on the disposal of qualifying business assets, subject to a lifetime limit of €1 million for disposals between 1 January 2016 and 31 December 2025, and €1.5 million for disposals on or after 1 January 2026.
• Qualifying assets include assets used in a qualifying business carried on by the individual, or ordinary shares (minimum 5% holding for a continuous three-year period) in a trading company or holding company of a qualifying group.
• The individual must have been a director or employee spending at least 50% of their working time in a managerial or technical capacity for a continuous three-year period within the five years before disposal.
• Relief is excluded for goodwill or shares disposed of to a connected company, and for investment assets, development land, and non-chargeable assets, unless the disposal is for bona fide commercial reasons and is not part of a tax avoidance arrangement.