Capital Taxes - Budget 2021

Oct 13, 2020

The only changes to capital taxes are an amendment to the Capital Gains Tax (CGT) Revised Entrepreneurial Relief and a technical change to address an avoidance issue when an original creditor disposes of a debt.

Entrepreneurial Relief

This relief gives a CGT rate of 10 percent on gains from the disposal of qualifying business assets – reduced from 33 percent. Under the changes announced today, an individual that held at least 5 percent of the ordinary shares of a qualifying company for a continuous period of any three years now qualifies for the relief. Provided all other pre-existing conditions are also met. This measure will come into effect 1 January 2021.

Previously, an individual had to own at least 5 percent for a continuous period of three years in the five years immediately before the disposal.

Section 541 – Debts

The Minister announced that a technical amendment to Section 541 Taxes Consolidation Act 1997,  will be brought in via Financial Resolution. This section of the legislation provides for no CGT to arise on the disposal of a debt by an original creditor. According to the Minister, this amendment is to address an avoidance issue.  The detail on this amendment is expected in the Financial Resolution.