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6 Top Tax Reliefs For Business Owners

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6 Top Tax Reliefs For Business Owners

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6 TOP TAX RELIEFS FOR BUSINESS OWNERS

Here are 6 Key tax reliefs available to Irish businesses to help them grow and develop. The reliefs provide business owners with very significant tax savings which is an incentive to grow and then possibly sell on the business at a profit, and pay less tax:

1. Entreprenuers CGT Relief

This relief provides for a 10% rate of CGT on the first €1m of lifetime chargeable gains when a person sells their business, subject to meeting certain criteria, this can save a taxpayer €230,000 in CGT.

2. Retirement Relief

Provides for relief from CGT on up to €750,000 of sales proceeds from sale or passing on of your business.

3. 7 Year CGT relief

This relief provides that for land or property acquired between 7 December 2011 and 31 December 2014 and retained for at least seven years, the capital gain is fully relieved from tax.

4. Start-up Relief for Entrepreneurs” (“SURE”); Start-up Capital Incentive (“SCI”) and the Employment Investment Incentive (“EII”)

These are three related income tax reliefs for investing in businesses “Start-up Relief for Entrepreneurs” (“SURE”); Start-up Capital Incentive (“SCI”) and the Employment Investment Incentive (“EII”).

The income tax relief operates by way of a deduction against total income (value depending on the level of income subject to 40% income tax).

5. Business Property Relief

Business Property Relief provides a valuable Capital Acquisitions Tax relief in respect of a gift or inheritance of business property. The relief reduces the taxable value of the relevant business property taken by the beneficiary by 90%. Subject to conditions and where available, therefore, business relief reduces the CAT payable from a rate of 33% to an effective rate of 3.3%.

6. KEEP Key Employee Engagement Programme

Key Employee Engagement Programme (“KEEP”) allows SMEs to compete with larger enterprises in terms of the share-based remuneration that could be offered. It allows an employer to grant their employees up to €100,000 share options per annum, which will be taxed favourably at 33% instead of the income tax rate which can be as high as 52%.

Summary

If you are in business it is worth reviewing your tax strategy to ensure you are availing of all the existing reliefs available and that there is a plan for the future selling or passing on of the business which doesn’t lead to a very high tax bill.


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