CGT retirement relief is available for individuals aged 55 years and over who dispose of relevant business assets (including agricultural assets) provided that certain conditions are met. However, restrictions to the relief introduced by Finance Act 2012 and aimed at encouraging lifetime transfers of businesses to the next generation came into force on 1 January 2014.
From 1 January 2014, where individuals aged 66 years and over dispose of relevant business assets to a child or a qualifying niece or nephew an upper limit of €3 million has been introduced on the consideration for the disposal to which retirement relief would apply. However, such disposals by individuals aged between 55 and 65 years are not subject to the upper limit in claiming the relief.
Also from 1 January 2014, where individuals aged between 55 and 65 years dispose of relevant business assets to a person other than a child or qualifying niece or nephew retirement relief is available on the consideration for the disposal up to a maximum of €750,000 but this upper limit is reduced to €500,000 for individuals aged 66 and over.
For individuals who might be contemplating passing on their business to the next generation in their lifetime, consideration should given to doing so before they reach the age of 66 years to ensure a greater level of CGT retirement relief.