The default position
Without relief, a gain on the disposal of business assets or shares is taxed at 33%, after deducting the base cost, incidental costs of disposal and the €1,270 annual exemption.
On a €2 million gain that is €660,000. The reliefs below are the difference between that and keeping most of it, and they are decided by conditions you satisfy in the years before the sale, not by anything you do at completion.
Revised entrepreneur relief
| Rate | 10% instead of 33% |
| Lifetime limit on gains | €1 million |
| Maximum saving | €230,000 |
The conditions concern ownership and involvement. Broadly, the assets must be chargeable business assets owned for a continuous period, and in the case of shares you must have owned at least 5% of the ordinary share capital and have been a director or employee spending the majority of your working time in the business.
The limit is a lifetime limit, not per transaction. A founder who used part of it on an earlier exit has less headroom on the next one, and that is worth establishing before a deal is structured rather than after.
Retirement relief, and what changed
Despite the name, retirement relief does not require you to retire. It relieves gains on the disposal of qualifying business or farming assets by an individual aged 55 or over who has owned and worked in the business for the required period.
Finance Act 2024 reshaped it, with effect from 1 January 2025.
- The upper age limit rose from 65 to 70, reflecting that people work longer.
- For individuals aged 55 to 69 disposing of qualifying assets to a child, where the market value exceeds €10 million, relief applies as if the consideration were €10 million.
- CGT arising on a transfer to a child above that €10 million limit may be deferred, and is fully abated where the child retains the assets for more than twelve years.
- A €3 million limit applies to disposals of qualifying assets by persons aged 70 and over, from 1 January 2025.
Share sale or asset sale?
The two are taxed very differently and buyers and sellers usually want opposite things.
| Share sale | Asset sale | |
|---|---|---|
| What is sold | The shares in the company | The trade and assets, the company remains yours |
| Taxed on | Your gain on the shares, at 33% before relief | The company's gain, then again when you extract the proceeds |
| Reliefs | Retirement and entrepreneur relief can apply | Harder to access personally; two layers of tax |
| Buyer's preference | Usually resisted — they inherit the history | Usually preferred — clean assets, no history |
A seller almost always wants a share sale. A buyer almost always wants assets. Where the deal lands changes your net proceeds materially, which is why the tax position belongs in the negotiation rather than after it.
What to clean up before you go to market
- Non-trading assets sitting in the company — investment property, surplus cash, a director's loan — can jeopardise relief and depress the price. Deal with them years ahead, not weeks.
- Get the share structure right. Shares issued to a spouse or family member shortly before a sale rarely achieve what people hope.
- Make sure filings are current. Overdue CRO returns and outstanding Revenue matters surface immediately in due diligence and cost leverage.
- Have three years of clean, consistent accounts where the management figures agree with the statutory ones.
- Confirm employment status for anyone engaged as a contractor. It is a standard due diligence finding and the liability sits with the company.
- Establish how much entrepreneur relief you have already used.
The deadlines that surprise sellers
CGT payment comes before the return. Tax on a disposal between 1 January and 30 November is due by 15 December of the same year. Tax on a December disposal is due by 31 January following. The return is not due until 31 October of the following year.
Complete in October and the tax is payable in December, before the ink is dry. That has to be in the cash flow from the outset.
When to start
Both reliefs test conditions across years of ownership and involvement. Failing one condition moves the entire gain back to 33%.
Two to three years before a planned exit is a reasonable starting point. Advice sought after heads of terms are agreed can occasionally still help with structure, but it cannot retrospectively create a qualifying period that does not exist.