By Richie Lennon
The tax on a business sale depends on who sells, what they sell and which relief conditions they meet. Ireland’s standard CGT rate is 31% for disposals from 7 October 2026. Revised Entrepreneur Relief can reduce qualifying gains to 10%, within the lifetime limit. Retirement Relief and a company share-disposal exemption have different tests. Check the structure, ownership history and cash you want personally before agreeing the deal.
The sale price is only part of your exit number. You need to know what remains after debt, fees, tax and any amount the buyer pays later.
We keep coming back to timing. In our published commentary on Entrepreneur Relief, the point was to get the ownership and working conditions in order well before an offer. The current rules must be checked against your actual history. A relief mentioned in a conversation is not a relief secured.
Start with three questions: who owns the assets, who will receive the proceeds, and what do you want to do with that money? Those questions separate a personal exit from money retained for investment inside a company.
Start with the sale route
| Proposed transaction | First tax question |
|---|---|
| You sell shares you own personally | What personal gain arises, and do the relevant relief conditions hold? |
| Your trading company sells its business assets | What tax arises inside the company, and how will you later take money out? |
| A holding company sells shares in a subsidiary | Does the company share-disposal exemption apply, and will proceeds stay in the company? |
| A sole trader sells qualifying business assets | Which personal CGT rules and business reliefs apply to those assets? |
| You transfer a business to a child | What CGT and CAT reliefs, valuations and continuing conditions apply? |
The same headline price can produce different cash for the owner. A tax-free disposal inside a holding company does not make a later dividend to you tax-free.
Ask for a comparison of the realistic routes before accepting the buyer’s preferred structure. Commercial terms, liability, financing and the buyer’s tax position also influence the negotiation.
The standard rate changed in October 2026
The standard CGT rate is 31% for disposals from 7 October 2026. The previous standard rate of 33% applies to earlier disposals. The 6 October financial resolution gives the change statutory effect from that date.
Establish the tax disposal date. It is usually the contract date under a written contract, rather than the day the buyer transfers money. Conditional contracts need their own examination. Delaying receipt does not automatically move the disposal into a lower-rate period.
The gain is also different from the price. Allowable acquisition and disposal costs, losses and reliefs belong in the calculation. Our general CGT guide explains that starting point and the personal payment timetable.
Revised Entrepreneur Relief: test the eligibility before the saving
Revised Entrepreneur Relief applies a 10% rate to qualifying gains. The lifetime limit increased to €1.5 million for gains arising from 1 January 2026. Earlier qualifying gains count towards the lifetime usage; the change does not give someone who used €1 million before 2026 a fresh €1.5 million allowance.
Qualifying business assets can include assets used in a sole trader’s trade and qualifying company shares. Investment assets and excluded activities require particular attention. Revenue’s current relief guidance explains the qualifying assets and exclusions.
For a share disposal, separate the shareholding history from your work in the business:
- The ordinary-share test requires at least 5% held continuously for at least three years at any time before the disposal.
- The director or employee involvement test concerns at least 50% of working time in a managerial or technical capacity for a continuous three-year period within the five years before disposal.
- The company and, where relevant, group must meet the qualifying business conditions.
These are different clocks. Stepping back from the business does not automatically destroy relief after an arbitrary number of months, but the qualifying service period can move outside the relevant five-year window.
Similarly, do not assume every subsequent dilution below 5% automatically cancels a previously completed qualifying holding period. Have the actual share history and disposal checked. Investment rounds and partner changes are still sensible review points, because the rights, history and proposed transaction all matter.
A dormant subsidiary is not a harmless detail
For the Revised Entrepreneur Relief group test, Revenue’s manual requires each relevant 51% subsidiary to carry on a qualifying business. A dormant or non-trading subsidiary can prevent the group qualifying. This is not the same as averaging the trading activity across the whole group.
Read the group chart alongside the accounts and the actual activities. A company left in place after a project ended can matter to the exit even if it barely appears in the monthly report. Revenue’s detailed Entrepreneur Relief manual covers these conditions.
Our Entrepreneur Relief guide has the fuller relief explanation. This article focuses on preparing the sale and comparing the proceeds.
What the difference can look like
Assume a disposal after 7 October 2026 produces a qualifying gain of €1.5 million, with the whole relevant lifetime limit unused. To isolate the rate comparison, this illustration ignores the personal exemption, other losses and other reliefs.
| Basis | Tax on the assumed gain |
|---|---|
| Standard rate, 31% | €465,000 |
| Revised Entrepreneur Relief, 10% | €150,000 |
| Difference | €315,000 |
This is a rate illustration, not a client result or a guarantee. The saving disappears if the conditions are not met. A €1.5 million sale price does not necessarily mean a €1.5 million gain.
Retirement Relief is a different decision
Despite its name, Retirement Relief does not require you to retire. Age, qualifying assets, ownership and working history matter. The buyer also changes the limits.
For qualifying disposals from 2025, the main limits are:
| Recipient | Age 55 to 69 | Age 70 or over |
|---|---|---|
| Qualifying child transfer | €10 million | €3 million |
| Disposal outside the family | €750,000 | €500,000 |
These limits concern qualifying asset value or consideration, not a €750,000 tax-free profit allowance. Previous disposals and marginal relief need review.
A child’s disposal within six years can claw back family-transfer relief. A separate deferral for qualifying transfers above €10 million has a 12-year condition: the child’s disposal within that period can bring the deferred liability into payment. Do not confuse those two rules. Revenue explains Retirement Relief and the deferral.
Family succession also needs a separate CAT assessment for the recipient. An answer to your CGT question does not settle the child’s tax or the legal transfer.
A holding company can change where the money stays
Section 626B can exempt a company’s gain on a qualifying disposal of shares. It is a company exemption, not a personal business-sale allowance.
The conditions include a real holding of at least 5% of the relevant share capital, distribution rights and assets on winding up, held for a continuous period of at least 12 months. A disposal can also qualify within two years after the company most recently ceased to satisfy the parent-company condition. The residence and trading tests must be met, and exclusions apply, including certain Irish land-rich shares.
The trading test here can apply to the investee or to the relevant businesses taken together. Do not copy that group test into Revised Entrepreneur Relief. Revenue’s current Section 626B notes set out the conditions and group rules.
If the exemption applies, sale proceeds remain company money. That can suit an owner planning further business investment. It may suit someone who wants all the cash personally much less well, because extraction creates another tax question.
A new holding company is not a guaranteed late-stage fix. Equally, a blanket claim that every new structure must independently wait a fresh 12 months ignores the detailed ownership and group rules. Ask a specialist to assess the existing history, proposed reorganisation, anti-avoidance provisions and commercial purpose.
What to review before an offer
Build a short exit file rather than relying on a headline rate:
1. Ownership history. Share classes, percentages, rights, acquisitions, reorganisations and earlier relief claims. 2. Working involvement. Roles, responsibilities and the periods supporting any relief condition. 3. Trading activity. What each relevant company actually does, including investments, property and dormant subsidiaries. 4. The deal. Shares or assets, buyer identity, conditional terms, earn-outs, retained liabilities and expected disposal date. 5. Your cash objective. Personal proceeds, family succession, retirement spending or funds retained for another business.
Review this before an investment round, ownership change, step back from management or material change in activity. Waiting for an offer leaves less room to decide, even where some options remain available.
Compare the cash, not just the tax percentage
Ask for a bridge from headline consideration to the amount available for your intended use. Include debt, transaction costs, tax, deferred consideration and any extraction tax. Show when each amount is received or paid.
An earn-out is not cash you can spend today. A tax payment may arrive before the final consideration. The legal and tax treatment of contingent proceeds needs review, alongside the commercial risk that the buyer never pays the full amount.
For an agency, dependable earnings, client durability and owner dependence influence the commercial price as well. Our agency valuation guide covers preparation on that side of the exit.
What if the offer has already arrived?
Establish which conditions have already been satisfied and which remain open. Get a written calculation for the proposed deal and realistic alternatives. Do not assume a delay in completion changes the tax date or repairs the history.
Changing ownership or moving assets during negotiations can itself create tax, legal or buyer-consent consequences. An artificial restructuring is not something to undertake from a blog checklist.
The useful question is: what can lawfully change now, what cannot, and what does each option leave after tax? That lets you negotiate with the actual exit number in view.
If you run a growing Irish business turning over €250,000 or more, a Finance Fit Call can establish whether Around Finance’s ongoing support fits. Our tax accounting service is the starting point. Complex disposal and structuring work requires specialist involvement and a separately agreed scope.
FAQs
How do I reduce CGT when selling my business?
Identify the seller, assets and intended use of proceeds, then test the reliefs against your history. Revised Entrepreneur Relief, Retirement Relief and Section 626B are different routes with different conditions. None follows automatically from calling the transaction a business sale.
Is the standard business-sale CGT rate still 33%?
The standard rate is 31% for disposals from 7 October 2026. Earlier disposals remain under the preceding standard rate. Establish the relevant disposal date rather than using the day the money arrives.
Can a sole trader qualify for Entrepreneur Relief?
Yes, qualifying assets used in a trade can be eligible. The relief is not confined to company share sales. The assets, activity, ownership history and exclusions still need to be checked.
Do I lose Entrepreneur Relief if my holding falls below 5%?
Do not assume that automatically. The shareholding test concerns a continuous qualifying three-year holding at any time before disposal. Check the complete history, disposal and other conditions before a dilution or sale.
Can I qualify after stepping down as a director?
Possibly, if the qualifying service period and other conditions remain satisfied. The service test examines a continuous three-year period within the five years before disposal, including the required working time and capacity.
Does a holding company make my personal sale proceeds tax-free?
No. A qualifying company share disposal may be exempt inside the company. Taking that money personally is a separate transaction and needs its own tax calculation.
Does Retirement Relief mean I must retire?
No. It has age, asset and history conditions, but retirement itself is not required. Family transfers and outside-family disposals have different limits and continuing conditions.
How early should I plan an exit?
Before changes that affect the reliefs, structure or deal options. Investment rounds, role changes, succession plans and changes in trading activity are useful review points. An offer is a reason to review urgently, not proof that nothing can be done.
