CGT Entrepreneur Relief

This is an incentive for serial entrepreneurs who have disposed of assets to reinvest in assets used in new productive trading activities in the period 1 January 2014 to 31 December 2018. Where they later dispose of their investment after a three year holding period, the CGT payable on that disposal will be reduced by the lower of

• The CGT paid on a previous disposal of assets during the period from 1 January 2010, and
• 50% of the CGT due on the disposal of the new investment

 This will apply where the individual applies all or part of the after tax consideration on the original disposal in acquiring chargeable business assets. These include

• Goodwill or an interest in an asset used wholly for the purposes of a new business carried on by an individual or
• New ordinary shares issued between 1 January 2014 and 31 December 2018 in a company that carries on a new business which is a micro, small or medium sized enterprise as defined in Article 2 of the Annex to the Commission Recommendation of 6 May 2003, where the individual has control of the company and is a full time working director of the company. However, shares, securities or other assets held as investments will not qualify for the relief.

The cost of the new investment must be at least €10,000.

A ‘full-time working director’, in relation to a qualifying company, means a director required to devote substantially the whole of his or her time to the service of the company in a managerial or technical capacity. The activities of the new business must comprise of “relevant trading activities” carried on by an individual or by a qualifying company that were not previously carried on by that individual or qualifying company or by any person connected with that individual or qualifying company.

The scheme is subject to introduction by Ministerial Order, pending clearance from the EU.

Contact your OSK Tax Advisor for further information on CGT Entrepreneur Relief.