Transferring an asset (Capital Gains Tax – CGT)

CGT reliefs: Disposal of a business or farm

Disposal of a business or farm other than to your child (Retirement Relief)

If you are 55 or older, you may be able to claim CGT relief when disposing of any part of your business or farming assets. Although this is referred to as Retirement Relief, you do not need to retire from the business/farming in order to qualify.

There are certain circumstances in which you may qualify for this relief before you are 55. These circumstances are where:

• you are unable to continue farming due to ill health
• you reach the age of 55 within 12 months of the disposal.

For disposals made up to and including 31 December 2013, you can claim full relief when the market value at the time of disposal does not exceed €750,000. The threshold is reduced to €500,000 if both of the following apply:

• the disposal takes place on or after 1 January 2014, and
• you are 66 or older.

If the market value is more than the above defined threshold, marginal relief may apply. This limits the CGT to half the difference between the market value and the threshold.

The threshold of €750,000 (€500,000 after 1 January 2014 for persons aged 66 or older) is a lifetime limit. If you exceed this threshold, we will withdraw relief given on earlier disposals.

You can find full details of the relief, including the assets that qualify for the relief, in the Disposals of business or farm on "retirement" manual.

Disposal of a business or farm to your child

You may dispose of all or part of your business or farming assets to your child. If you do, you may be entitled to relief from CGT. Your child can include:

• a child of your deceased child
• your niece or nephew who has worked full time in the business or farm for at least five years
• your foster child whom you have maintained for at least five years.

The amount of relief that you can claim depends on your age at the time of disposal:

• Up to 31 December 2013, you may claim full relief if you are 55 or older.
• From 1 January 2014, you may claim full relief if you are between 55 and 65. If you are 66 or older the relief is restricted to €3 million.

If your child disposes of the asset within six years, we will withdraw the relief. Your child must pay CGT on the original disposal by you, in addition to the CGT on their own disposal.

Next: CGT exemptions