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Business Relief

  1. Overview
  2. What are the conditions for Business Relief?
  3. What is relevant business property?
  4. Businesses which do not qualify for relief
  5. How do you calculate the relief amount?
  6. Minimum ownership period of business property
  7. Circumstances in which relief can be withdrawn
  8. How do you claim Business Relief?

What is relevant business property?

You may claim Business Relief where you receive a gift or inheritance of ‘relevant business property’. A gift or inheritance qualifies as relevant business property where, on the valuation date, it is:

  • a business of a sole trader such as a shop or pub
  • an interest (share) in a business such as a sole trader going into partnership or a retiring partner transferring their share
  • land, buildings, plant or machinery used in a business carried on by a company or partnership. These must have been owned by the disponer, rather than the company or partnership. In the case of a company, the company must have been controlled by the disponer immediately before the gift or inheritance.
  • unquoted shares or securities of a company where on the valuation date and after taking the gift or inheritance the person receiving it owns:
    • over 25% of the voting rights
    • controls the company
    • or
    • owns at least 10% or more of the combined value of all issued shares and securities. In this case, they must have worked full time for the company for five years ending on the date of the gift or inheritance.
  • quoted shares in, or securities of, a company where:
    • they were owned by the person giving them immediately before the gift or inheritance
    • they were unquoted at the date they were acquired by the person giving them or at 23 May 1994, whichever is the later
    • all the other conditions for unquoted shares (apart from being unquoted) are satisfied.

Business Relief is not available on the transfer of individual assets, even if those assets are used in the business.

  • Example 1

    Anne started a crafts business in her own premises 20 years ago. The crafts are purchased by local shops to sell to the public. Her nephew, Vincent, is also her employee.

    She gives Vincent a gift of the premises, but she still owns the business. The premises will not qualify as relevant business property.

  • Example 2

    ABC Ltd, a private company, was incorporated in Ireland on 1 January 1990. The shares are held by:

    Mary Murphy 33.33%

    John Walsh 33.33%

    Michael Reid 33.33%

    Mary wishes to gift her holding to her son, Maurice, who will then have a 33.33% holding.

    These shares qualify as relevant business property.

  • Example 3

    GHI Ltd, a private company, was incorporated in Ireland on 1 November 1980. It has issued only one class of share. These are held by:

    John Buckley (parent) 40%

    Mary Buckley (parent) 40%

    Michael Buckley (son) 20%

    Catherine is not related to the Buckleys. She has worked as full-time accounts manager with the company since 1 November 1980. John wishes to give Catherine a 10% shareholding as a gift.

    These shares will qualify as relevant business property if Catherine continues to work full-time in the company until the date she receives the gift.

Next: Businesses which do not qualify for relief

Published: 08 August 2024 Print this page

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