Capital Taxes

The Minister announced changes to the rules for capital acquisitions tax for foster children and a new capital gains tax relief for angel investment. In addition, the Minister announced some welcome enhancements to Retirement Relief, increasing both the age-limit and the asset-value limit.

Capital Acquisitions Tax

Foster children are to be able to avail of the Group B capital acquisitions tax lifetime tax free threshold, currently €32,500, based on their relationship to their foster parents.

Capital Gains Tax (“CGT”)

Retirement Relief

In line with Government policy on the age of retirement, from 1 January 2025 the upper age limit for capital gains tax Retirement Relief is to be extended from 65 until the age of 70. The reduced relief which was available on disposals from age 66 onwards will now apply from age 70. Also from 1 January 2025, there will be a new limit of €10 million on the relief available up to age 70 for disposals to a child.

Angel Relief

A new CGT relief is also being introduced to encourage angel investment innovative start-ups, in line with the recommendation from the Commission on Taxation and Welfare.

The relief will be available to an individual who invests in an innovative start-up small and medium enterprise (SME) for a period of at least 3 years.  The investment by the individual must be in the form of fully paid-up newly issued shares costing at least €10,000 and constituting between 5 percent and 49 percent of the ordinary issued share capital of the company.  

The scheme will include a certification process, which will  be  carried  out  by  Enterprise  Ireland,  to ensure  the  relief  is  targeted  at  innovative SMEs that can  demonstrate  financial  viability  and compliance with the requirements of the EU General Block Exemption Regulation.

Qualifying investors may avail  of  an  effective  reduced  rate  of  CGT  of  16 percent,  or  18 percent  if through  a  partnership, on a gain up to twice the value of their initial investment.  There is a lifetime limit of €3 million on gains to which the reduced rate of CGT will apply.