On 24 May 2019 KPMG responded to the Department of Finance consultation on Ireland’s CGT Entrepreneur Relief regime.
This regime offers a 10% rate of capital gains tax (CGT) on gains arising to eligible entrepreneurs who sell their business – including shareholdings of at least 5% in a trading company or a trading group.
The consultation asks for feedback on what aspects of the current structure and design of Entrepreneur Relief work effectively, and which do not.
KPMG’s response highlights the main barrier to the effectiveness of Entrepreneur Relief as an incentive to drive entrepreneurship is that the benefit of the 10% rate on the entrepreneur’s capital gains is capped at €1million lifetime gains.
KPMG recommends that the 10% rate of tax is retained and the lifetime gains limit is increased to €10 million. KPMG also recommends extending the 10% rate to dividends received by entrepreneurs which meet the same conditions for holding shares and working director/ employee as is required for the capital gains tax regime.
Registered TaxWatch users can also read more about KPMG’s submission on Entrepreneur Relief here.
If you wish to discuss KPMG’s response to the CGT Entrepreneur Relief consultation, please contact any member of your KPMG team.