From 1 January 2025, the age limit for qualifying individuals for the maximum amount of CGT retirement relief is being increased from 65 years to 69 years.
There will be a new limit of €10 million on the relief available for disposals to a child until they reach the age of 70. Currently no cap applies unless the disposer is at least 66 years of age.
A person does not have to actually retire from working in a business to avail of retirement relief.
The relief can be availed of by persons aged 55 or older when disposing of any part of a business.
If a person is aged under 55, they may qualify for the relief if they are unable to continue working in their business due to ill health and if they reach age 55 within 12 months of the disposal date.
The reliefs are available to:
- A ‘child’ (including natural child; stepchild; child of a civil partner; adopted child; child of a deceased child; niece or nephew that has worked in the business for five years; or foster child who the disponer has maintained for five years before they turned 18);
- A person outside the family.
For disposals to a ‘child’, the full relief can currently be claimed if the disponer is between 55 and 65. If the disponer is over 66 the relief is restricted to €3 million. Again the full relief can be claimed up to the age of 70 after 1 January 2025.
If the recipient of the asset disposes of it within six years the relief is withdrawn and he/she must pay CGT on the original disposal and CGT on their own disposal.
For a person outside the family if the disponer is under 66 (or under 70 from 2025) full relief can be claimed when the market value at the time the disposal is made does not exceed €750,000 or if the disponer is 66 or older (70 or older from 2025) does not exceed €500,000.
Marginal relief may apply if the market value of a single disposal is more than the threshold which limits the CGT to half the difference between the market value and the threshold.