Revised Entrepreneur Relief and Retirement Relief When You Sell Your Business
Selling your Irish business? Compare Revised Entrepreneur Relief and Retirement Relief: who qualifies, the limits, and which one suits your exit.
- Author
- Abbey Blue Formations
- Published
- Reading time
- 6 min read
Pat is 58. He has owned 100% of a plumbing company in Wexford for 20 years, and a competitor has just made him an offer. His daughter, who already runs most of the jobs, has also said she might like to take the business on.
Before he agrees anything, Pat needs to know which tax relief fits each route. The two that matter are entrepreneur relief in Ireland (officially Revised Entrepreneur Relief) and retirement relief in Ireland. They have different tests, limits and results depending on who the buyer is. All figures in Pat's example are made up and simplified.
Entrepreneur relief in Ireland at a glance
Capital Gains Tax (CGT) on most gains is 31% for disposals from 7 October 2026. Entrepreneur relief in Ireland cuts that to 10% on gains from qualifying business assets.
There is a lifetime limit on the gains that get the 10% rate:
- €1 million of gains for disposals from 1 January 2016 to 31 December 2025
- €1.5 million of gains for disposals on or after 1 January 2026
Earlier qualifying gains count toward the total. There is no minimum age.
Who qualifies for Revised Entrepreneur Relief
For a company owner selling shares, Revised Entrepreneur Relief has three main tests:
- Shareholding: you held at least 5% of the ordinary shares for a continuous three years at some point before the sale.
- Working time: you were a director or employee who spent at least 50% of your time in a managerial or technical role, for a continuous three years within the five years before the sale.
- Trading company: the company carries on a qualifying business, not mainly investment.
Sole traders selling business assets must have owned them for three continuous years in the five years before the sale.
Watch the incorporation trap. Revenue's guidance says you cannot add your years as a sole trader to your years as a shareholder after switching to a company. If you incorporated two years ago, your share clock started then.
How retirement relief in Ireland works
Retirement relief in Ireland is available from age 55. You do not have to stop working. You only have to dispose of qualifying business assets or shares. An earlier claim is possible in limited cases of serious ill health, with medical evidence, if you turn 55 within 12 months of the disposal.
The ownership tests are longer. You generally need to have owned the shares for at least 10 years, and been a working director for at least 10 years, with at least 5 of those as a full-time working director. The company must be a trading company and a "family company", which in most owner-managed businesses means you hold at least 25% of the votes. Unlike Revised Entrepreneur Relief, years as a sole trader before you moved the business into a company can count here.
The limits depend on who receives the business.
Sale outside the family (from 1 January 2025)
- Aged 55 to 69: full relief where the sale value is up to €750,000
- Aged 70 or over: full relief up to €500,000
- Above the limit, marginal relief caps the CGT at half the amount by which the value exceeds the limit
- These are lifetime limits
Transfer to a child (from 1 January 2025)
- Aged 55 to 69: relief on value up to €10 million
- Aged 70 or over: relief on value up to €3 million
- If your child disposes of the assets within six years, the relief is clawed back
Above €10 million, CGT can be deferred, but it becomes payable if your child disposes of the assets within 12 years
Pat's two exit routes compared
Assume Pat's shares are worth €1.2 million and his gain is €1.1 million. These are invented, simplified figures that ignore costs and other reliefs.
| Route | Revised Entrepreneur Relief | Retirement relief |
|---|---|---|
| Sale to competitor | €1.1m gain at 10% = €110,000 | €1.2m is over the €750,000 limit, so CGT capped at half of €450,000 = €225,000 |
| Gift to daughter | €1.1m gain at 10% = €110,000 | Under the €10m limit, so full relief, subject to the six-year clawback |
Without either relief, a €1.1 million gain at 31% would cost €341,000. On these numbers, entrepreneur relief suits the outside sale, and retirement relief suits the family transfer. His daughter may also have Capital Acquisitions Tax to consider on the gift, which is a separate question.
Can you claim entrepreneur relief and retirement relief?
People often ask can you claim entrepreneurs relief and retirement relief on one exit. They are separate reliefs with separate conditions, and some owners meet both. Retirement relief removes CGT up to its limit, while entrepreneur relief reduces the rate.
How they fit together depends on your figures, your age, the deal structure and what you have claimed before. If you are asking can you claim entrepreneurs relief and retirement relief together, settle the answer with your adviser before heads of terms are signed, not after.
Steps to take years before you sell
Most of what decides these reliefs happens years before the sale.
- Keep share records clean. Your register of members and books of account should show exactly when you acquired your shares.
- Keep director records current. If you are adding or removing directors, file the change with the CRO on time, because dates of directorship matter.
- Stay a trading company. A large build-up of cash or investments can put the trading status at risk. Review it with your annual accounts and CT1 each year.
- Show your working time. Revenue may ask for evidence, such as payroll records, that you worked in the business in a managerial or technical role.
- Plan your own return. The relief is claimed through your personal tax return, so plan your Form 11 filing for the year of the sale.
Frequently Asked Questions
What is Revised Entrepreneur Relief?
It is a CGT relief that taxes qualifying business gains at 10% instead of the standard rate. The lifetime limit is €1.5 million of gains for disposals on or after 1 January 2026, and earlier qualifying gains count toward it.
Can you claim entrepreneur relief and retirement relief on the same sale?
Some owners meet the conditions for both. How they interact depends on the figures and your history of claims, so get advice before you agree the deal.
Do I have to retire to get retirement relief?
No. You must be 55 or over (with a limited ill-health exception) and dispose of qualifying assets. You can keep working afterwards.
Does entrepreneur relief apply if I sell to a family member?
Yes, it can apply to any qualifying disposal, including a gift, which is treated as a disposal at market value. For a transfer to a child, retirement relief is often worth comparing.
How do I claim the relief?
You include the relief when you calculate CGT and give details of the gain and the relief on your tax return for the year of the disposal.
Talk to us before you agree a price
The best time to plan an exit is before anyone mentions a figure. Abbey Blue Formations can get your company records, director history and accounts in order so your adviser has what they need. You can also use our Formation Calculator if you are thinking of incorporating first. To arrange a call, click here.