Finance Bill 2023 changes to retirement relief

The Finance Bill 2023, shortly to be a Finance Act, amends Section 599 TCA 1997 CGT Retirement Relief (“RR”).  Broadly speaking, RR provides relief from CGT on the disposal of trading assets or shares in trading companies by persons aged over 55 who have owned the assets for 10 years and worked in the business for at least 10 years, with five of those years being full-time.

Section 599 relates to relief on disposals to a child (as defined in Section 599). At present, if the individual disposing of the qualifying assets is aged between 55 and 65 years of age and the disposal is to a child, full relief may be claimed. The Bill increased the upper age limit from 65 years to 69 years. However, a new cap of €10m will apply to claims for relief where the individual disposing of the assets to a child is aged from 55 to 69. The cap of €10m is not per child, it is a collective cap.

The reduced relief which is available on disposals from age 66 onwards (the existing €3m cap) will therefore now apply where the individual is 70 or older. The table below sets out the new relatively complicated rules:

What should you do?

• Individuals aged 65 at any time up to 31 December 2024 should consider transferring trading assets before 31 December 2024 if the market value of the market value exceeds €10m.
• Individuals aged 66 with a business valued over €3m should wait until 1 January 2025 to transfer any trading assets. 
• For individuals already over 70 years of age, the changes do not make any difference.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars corporate tax team below:

December 2023