Dáil Éireann Debate, Tuesday - 15 July 2014
239. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of allowing entrepreneurs-small to medium enterprise start-ups a three-year capital gains tax window for selling on their ideas or businesses. [31259/14]
Amharc ar fhreagraSection 45 of Finance (No 2) Act of 2013 provides for a capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets. Commencement of the relief is subject to EU state-aid approval. Subject to EU approval, the relief will apply from 1 January 2014 to individual entrepreneurs:
- Who have made disposals of assets since 1 January 2010 on which they have paid capital gains tax;
- Who invest at least €10,000, in the period from 1 January 2014 to 31 December 2018, in acquiring chargeable business assets that will be used in a new business and
- Who subsequently (after a minimum period of 3 years) dispose of those chargeable business assets at a gain giving rise to a capital gains tax liability.
The relief will be given on the tax due on any chargeable gain arising on the subsequent disposal of the chargeable assets after a minimum period of 3 years and will amount to the lower of:
- the full amount of capital gains tax paid on the initial disposal made since 1 January 2010 or
- 50% of the CGT payable on the disposal of the new chargeable business assets.
If an entrepreneur reinvests the proceeds of that subsequent disposal in a further new business, the relief can also apply on a subsequent disposal of the chargeable business assets of that further new business. Where less than the full proceeds of a disposal on which capital gains tax has been paid are reinvested, only that proportion of the capital gains tax relative to the amount reinvested will qualify for relief. The relief will be given in the form of a tax credit equal to the lower of the capital gains tax paid on the disposal of assets made on or after 1 January 2010 or 50% of the capital gains tax on any gain from the future disposal of the chargeable business assets. The relief is estimated to have a full year cost of €20 million by 2018.
