Succession Planning: Tax and Retirement Reliefs in Ireland
Passing on an Irish business engages three main taxes and their reliefs: Capital Gains Tax on the disposal (reduced by Retirement Relief and Revised Entrepreneur Relief), Capital Acquisitions Tax (gift/inheritance tax) on the person receiving it (reduced by up to 90% by CAT Business Relief or Agricultural Relief), and stamp duty on the transfer. Used together and planned in advance, these reliefs can dramatically reduce, sometimes eliminate, the tax cost of a transfer.
The tax question is what stops most business sales and handovers in their tracks. Get it right and the reliefs available in Ireland can reduce the tax on passing on a business to a fraction of what it would otherwise be; get it wrong, or leave it too late, and tax can consume a large share of the value.
This page explains, in plain terms, the reliefs that matter when a business changes hands in Ireland. It is a guide, not advice: the reliefs have detailed conditions, and the right combination depends on your circumstances. As chartered accountants and tax advisers, we model these for your specific situation as part of the succession plan.
The three taxes in a succession
| Tax | Who pays | The relief that helps |
|---|---|---|
| Capital Gains Tax (CGT) | The person disposing (the owner) | Retirement Relief; Revised Entrepreneur Relief |
| Capital Acquisitions Tax (CAT) | The person receiving (the successor) | CAT Business Relief; Agricultural Relief |
| Stamp Duty | The person acquiring | Reduced rate for certain transfers; consanguinity relief on farm transfers |
Two taxes, one transfer
The same transfer is usually taxed on both sides: CGT on the person giving and CAT on the person receiving. Ireland avoids double taxation through same-event credit rules, but only when the transfer is structured correctly. Coordinating both sides is exactly what tax-led succession planning does.
Retirement Relief (CGT)
Retirement Relief can relieve some or all of the Capital Gains Tax when an owner aged 55 or over disposes of qualifying business assets, whether to a child or to a third party, subject to ownership periods, working-director conditions and value thresholds that vary with age. Despite the name, you do not have to actually retire. It is one of the most valuable reliefs in a succession, and its conditions are precisely why planning ahead pays.
Revised Entrepreneur Relief (CGT)
Revised Entrepreneur Relief reduces the CGT rate to 10% on qualifying business disposals up to a lifetime limit, where the ownership and working conditions are met. It often applies to a management buy-out or trade sale and can sit alongside other planning to lower the owner's CGT.
CAT Business Relief (gift/inheritance tax)
For the successor, Capital Acquisitions Tax is often the bigger concern. CAT Business Relief can reduce the taxable value of qualifying business assets by up to 90%, turning a potentially large inheritance-tax bill into a modest one, provided the business qualifies and the assets are held for the required period afterwards. Agricultural Relief does the same for farms.
Every relief has conditions and time limits
Ownership periods, minimum working hours, age thresholds, asset tests and post-transfer holding periods all apply, and several reliefs carry a clawback if conditions are broken. None of them can be bolted on at the last minute. The single most valuable thing you can do is start the planning early enough to meet the qualifying conditions.
How this links to your wider tax position
Succession tax does not sit in isolation: it interacts with your income tax, your pension and your estate as a whole. Because McManus McCabe handles your tax compliance and consultancy as well as the succession, we plan the transfer inside your full tax picture rather than in a silo. See our tax compliance and consultancy service.
What it costs, and how we scope fees
We do not publish a single price because no two engagements are the same: the fee depends on the size and complexity of the business, the records available and the scope agreed. After an initial consultation we issue a written, fixed-fee proposal setting out exactly what is included, the timescale and the cost, so there are no surprises. Where an engagement is likely to run in stages (for example an investigation or a multi-year succession), we scope and price each stage separately.
Frequently Asked Questions
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Do I have to retire to claim Retirement Relief?
No. Despite the name, Retirement Relief does not require you to actually retire, it relieves CGT on disposing of qualifying business assets from age 55, subject to conditions. You can claim it and stay involved in the business. -
What is CAT Business Relief worth?
Where the conditions are met, it reduces the taxable value of qualifying business assets passed on by up to 90%, often the difference between a large inheritance-tax bill and a small one for your successor. -
Can I use more than one relief?
Often, yes. A well-planned succession typically combines CGT reliefs on the owner's side (Retirement or Entrepreneur Relief) with CAT reliefs on the successor's side (Business or Agricultural Relief), coordinated so the reliefs work together. -
How far ahead should tax planning start?
Several reliefs have qualifying periods measured in years and clawbacks afterwards, so three to five years ahead is ideal. Starting early is the most reliable way to secure the reliefs and reduce the tax.
Talk to Adrian or Teresa
McManus McCabe is a partner-led chartered accountancy practice in Dublin. Every engagement is handled directly by Adrian McManus (FCCA) or Teresa McCabe (FCA, Dip. Tax), not passed down a chain, and scoped with a clear, fixed-fee proposal before any work begins, so you know what it costs, what you get and how long it takes.
Book a confidential, no-obligation consultation to talk through your situation and receive a written quotation.
