Wednesday, 2 October 2019

Questions (117)

Robert Troy


117. Deputy Robert Troy asked the Minister for Finance his views on a proposal by an organisation (details supplied); and if costs would arise. [40107/19]

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Written answers (Question to Finance)

In general, consideration of any tax changes in advance of Budget 2020 are undertaken within the annual Budgetary and Finance Bill process. The Deputy will appreciate that I cannot comment on any possible changes at this time.

As regards the relief, I am advised by Revenue that capital acquisitions tax relief is available in relation to certain business assets passing by way of gifts or inheritances. This ‘business relief’ takes the form of a 90% reduction in the taxable value of gifted or inherited business property. For relief to apply, the business assets must constitute what is defined as “relevant business property”. Included in this definition are unincorporated businesses, unquoted shares in certain family companies and assets used wholly or mainly for the purposes of a business carried on by a family company or a partnership. A business consisting wholly or mainly of dealing in land, shares, securities or currencies or making or holding investments does not qualify for business relief.

The relevant business assets must have been owned by the disponer for a minimum period prior to the gift or inheritance. The minimum period of such ownership for gifts is 5 years and for inheritances is 2 years.

There is a ‘past use’ test in that the relevant business assets must have been used wholly or mainly for the purpose of the business concerned throughout the 2-year period immediately prior to the gift or inheritance. The value attributable to assets not satisfying this ‘past use’ test (known as ‘excepted assets’) is excluded from the relief. The operation of business relief does not include a ‘future use’ test in respect of assets that may be excluded from the relief as ‘excepted assets’.