Business sellers will keep more money
Published 12/10/2016 | 02:30
Entrepreneurs will keep more of the money they make from selling their businesses, but Finance Minister Michael Noonan retained a cap on the lifetime proceeds eligible for the reduced rate.
Under the new Budget, the rate of capital gains tax paid on the disposal of assets of the whole or part of a trade or business, was slashed from 20pc to 10pc. It was cut from 33pc last year.
But there is still a lifetime limit of €1m on such gains, and they must have owned the business for at least three years before selling.
Mr Noonan said he would review the €1m lifetime limit in future.
The president of the Irish Tax Institute, Mark Barrett, said that in a post-Brexit environment, Ireland still remains at a competitive disadvantage on a number of fronts.
A new, SME-focused, share-based incentive scheme that businesses have been seeking is coming, but again not till next year, the minister said.
Paying employees with shares is seen as a win-win for business, but current rules mean that staff are hit with tax bills long before they ever see a financial benefit from the shares.
"Employee participation in their company's ownership and profits has been shown to increase competitiveness and support employment and growth," he said.
The scheme will need sign off from the European Commission.