The new or ‘revised’ Entrepreneur Relief was introduced by Finance Act 2015. It is a Capital Gains Tax relief which reduces the rate of Capital Gains Tax on gains of up to €1,000,000 on the disposal of certain business assets. Business assets include a shareholding of at least 5% in a qualifying company.
Finance Act 2016 did not make significant changes to the relief other than the welcome reduction of the rate from 20% to 10%.
Interaction with Retirement Relief
Entrepreneur relief reduces the rate at which CGT is payable on a gain, whereas retirement relief relieves the CGT arising on the gain. Both reliefs can apply together. The gain arising on a disposal is calculated at the appropriate rate (10% under entrepreneur relief with 33% on the balance), and then it is relieved from CGT using retirement relief. Both reliefs have mandatory application.