The government have announced their intention to change the retirement relief applicable to capital gains tax where farmers and business owners pass on assets to the next generation or sell them to third parties.
The measures designed to incentivise timely farm transfers were announced as part of the Budget for 2012 (with further details to follow in the Finance Act 2012). The measures include full retirement relief from capital gains tax for intra-family transfers by individuals aged 55 to 66. An upper limit of €3m on retirement relief for business and farming assets disposed of within the family is introduced, where the individual transferring the assets is aged over 66 years. (The current unlimited amount applies for a transitional period of two years, for individuals currently aged 66, or who reach that age before 2014).
The current upper limit of €750,000 for assets transferred outside the family for individuals aged between 55 and 66 years will be maintained. The upper limit for retirement relief for business and farming assets transferred outside the family is reduced from €750,000 to €500,000 for individuals aged over 66 years. (The current upper limit of €750,000 applies for a transitional period of two years.)
This gives individuals who are thinking about retiring, two years to get their affairs in order to maximise the retirement relief available on passing assets to the next generation or to sell their assets to third parties. This time we can’t say we weren’t warned.
For further information on this and other ways to minimise taxation call us for a free consultation or leave a message on our contact us page.