The extent of the CGT exemption under retirement relief depends on the age of the disponer, or the person selling the business. If the disponer is between the ages of 55 and 65, the first €750,000 of the sale proceeds is exempt from CGT. For those aged 66 and over, the exemption is on the first €500,000. This means that if, for instance, you sell your company for €750,000 at the age of 62, you will not be liable to pay any CGT.
It's important to note that retirement relief doesn't necessarily require you to step away from the business. However, seeking professional advice before reaching the age threshold is crucial, as the value of the business plays a significant role in determining the tax implications.
It is essential to understand that retirement relief is available to all business owners in the event of a chargeable event, such as a sale or liquidation. Moreover, this relief is completely separate from any director pension benefits that may have been accrued over time.
Retirement relief can be a useful tool for Retirement planning in conjunction with Executive Pensions.
For more information, please contact your Client Manager in Borgo Accounting.
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