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Capital Taxes

The Capital Gains Tax ("CGT") rate of 33% remains unchanged.

CGT Entrepreneur Relief

No changes have been made to the CGT Entrepreneur relief. However, following on from an independent review of the relief by Indecon, the Minister has requested his department to review the findings of the report to determine whether any changes should be introduced to better support entrepreneurs and entrepreneurial activity. A summary of the main points/recommendations are as follows:

  • Entrepreneur relief should be retained and that the policy objectives of the relief remain valid.
  • Unfortunately, the Irish rate of CGT @ 33% compares unfavourably to our international counterparts.
  • While the relief did no impact on initial investment decisions, it does impact on the timing of asset disposals.
  • Requirement of 5% ownership should be adjusted to encourage firms to expand
  • A number of options were considered in relation to the increase of the lifetime limit, one of which recommends that the lifetime limit be increased to €12m for entrepreneurs who re-invest in a new business.

Farm Restructuring Relief

The above relief was introduced in Finance Act 2013 and it provides a relief from CGT on the disposal of farmland for farm restructuring purposes. The purpose of the relief is to improve the operation and viability of farms by allowing sales and purchasers or exchanges of land to bring them closer together. Section 34 of the Finance Bill extends the period of relief from 31st December 2019 to 31st December 2022. This amendment will come into effect by way of a Commencement Order made by the Minister for Finance.

Capital Acquisitions Tax ("CAT") 

The CAT threshold increase in the Group A Tax-Free Threshold for gifts/inheritances (largely refers to transfers from parents to their children) from €320,000 to €335,000 will be effective for all gifts/inheritances taken on or after 9 October 2019.

Dwelling House Relief

Section 63 of the Bill amends Dwelling House Relief following the High Court decision re: Dear case in 2018. The relief can only apply to cases where, subject to other conditions, the beneficiary does not hold an interest in any other dwelling house other than the qualifying residence. The High Court decision held that, in the case of an estate of a deceased person, the relief could still apply where the beneficiary also inherited other houses from the deceased person’s estate. The amendment now ensures that if an individual inherits an interest in more than one residential property from the same deceased person, they will not be entitled to claim dwelling house relief on any property. 

An amendment to the law relating to exchange of information between Revenue and the Probate Office in light of a transition by the Probate Office to an electronic filing process for probate applications. 

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