01 4975859 ​​[email protected]
Ryan & Crowley Chartered Accountants
  • Home
  • Services
  • Clients
  • Budget 2024
  • Latest News
  • Contact
  • Business to Business

    Providing Step by Step Guidance

    Get in touch for your free consulation today

    Contact Us
  • Diversity

    Hands On, Client focused approach

    Get in touch for your free consulation today

    Contact Us
  • Over 30 Years Experience

    Insight into all aspects and types of business

    Get in touch for your free consulation today

    Contact Us

Succession Planning

29/4/2021

0 Comments

 
Succession planning can mean many things to different people ranging from “should I make a Will” to somebody who consciously considers the range of tax reliefs available and proactively looks at passing assets to the next generation.
There are several fundamental questions that need to be considered in the context of succession planning such as:
  1. If I give assets away now, do I have sufficient funds to live on?
  2. Are my children sufficiently mature to receive monies or assets?
  3. If I have a business, are my children capable of successfully managing the business or should I consider an external management team?
  4. How do I achieve the above in a tax efficient manner?
Picture
It is important to ask the question “What do you want in the future?”. Once this has been established, then we can consider any taxation matters that arise.

If you wish to sell or transfer a business during your lifetime this can result in a costly Capital Gains Tax (CGT) liability for you. A relief known as retirement relief may be available when looking at the CGT implications on a transfer or gift.

Retirement relief provides relief to individuals on the sale or transfer of certain business assets (including agricultural assets), provided certain conditions are met. One of these conditions is that you must be aged 55 years or older however, you do not actually have to retire. This relief can eliminate the CGT due on shares in trading companies where the business assets and/or certain shares in trading companies are transferred to the next generation. If this is done between the ages of 55 and 65, there is no cap on the value of the business assets. Where the transfer is made after you turn 66 years there is a threshold of €3 million.

Full CGT relief may be available up to a limit of €750,000 if this occurs when you are between the ages of 55 and 65 on transfers to persons other than a child. The limit is reduced to €500,000 once you turn 66.

This relief could result in significant tax saving for a person transferring their business property. Transfers of business assets by way of a gift or inheritance may result in a Capital Acquisition (CAT) liability for the individual receiving the gift or inheritance. Again there are certain reliefs that should be considered such as business property relief or agricultural relief depending on the business to hand.

If the gift or inheritance consists of certain business assets (including certain shares in family companies) the market value of the business assets can be reduced by 90% if certain conditions are met. This relief can facilitate the transfer of a family business to the next generation.
Agricultural relief is a valuable relief which in certain circumstances can provide for the transfer of farm land and farming property between generations, without incurring a large CAT bill. A gift or inheritance of cash where the cash is used to purchase agricultural land within two years of the date of the gift or inheritance could qualify for agricultural relief if conditions are met.

If you plan to gift certain assets during your lifetime, you may be liable to CGT on the transfer of the asset and the beneficiary may be subject to CAT on the same event. A credit for the CGT paid can be claimed against the CAT liability on this same event. A clawback of this credit may arise if the asset is sold by the beneficiary within 2 years. A valuable exemption known as Dwelling House Relief is currently available. This relief allows for the transfer of a residential property either by gift or inheritance to occur free of CAT, provided certain conditions are met. Furthermore, the value of the property is not taken into account when calculating the tax free thresholds for future gifts or inheritance. If you wish to gift an annual amount to your children or grandchildren, there is a small gift exemption of €3,000 that any individual can receive per calendar year free of gift tax. This sum can be received from numerous donors without being subject to tax.

TIPS:
  • Utilise the €3,000 a year small gift exemption.
  • Be mindful of age in terms of retirement relief.
  • Consider transferring assets that have a market value which is lower than the price paid for the asset as this should result in no CGT.
  • Review gifts to children where they are over 18 to ensure they do not fall foul of Revenue guidelines.
  • If you have foreign properties, consider any foreign taxes that may arise in the event of your death.

​For a fully accurate guide to succession planning in your circumstances, speak with us today.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Archives

    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    July 2019
    June 2019
    May 2019
    April 2018
    March 2018
    December 2017
    July 2017
    May 2017
    April 2017
    March 2017
    February 2017
    October 2016

    Categories

    All
    Brexit
    Budget
    Business
    Company Law
    Covid 19
    Covid-19
    Customs
    Employment Law
    Energy Efficiency
    Export
    Finance
    Foreign Exchange
    Franchising
    Legal
    Offshore
    Revenue
    Tax
    VAT
    Working From Home

    RSS Feed

Picture
We create custom business to business strategies.

Over 30 years of experience
Privacy Policy | Cookie Policy

SITE MAP

About Us

Our Services

News

Budget 2019

Contact Us




CONTACT DETAILS

  • Unit 3A, Block 3,
    Bracken Business Pk, D18V4K6

  • 01 4975859
  • 01 4977782
  • [email protected]
  • ryanandcrowley.com

    QUICK CONTACT

Submit
© 2025 Ryan & Crowley Chartered Accountants
Proudly powered by Weebly