Entrepreneur Relief in Ireland: How to Qualify for 10% CGT When Selling Your Business

Planning to sell your business? Revised Entrepreneur Relief may reduce the Capital Gains Tax you pay on qualifying gains, subject to specific eligibility conditions and a lifetime limit.

Selling a business can be one of the most significant financial decisions an entrepreneur makes. After years of building a company, the tax payable on the sale can have a substantial impact on the amount you ultimately receive.

In Ireland, Revised Entrepreneur Relief can reduce Capital Gains Tax (CGT) to 10% on qualifying business gains. For qualifying disposals made on or after 1 January 2026, the lifetime limit increased to €1.5 million.

However, not every business sale qualifies. The relief has specific conditions relating to the assets being sold, the seller’s ownership and involvement in the business, and the nature of the company’s activities.

This guide explains how Revised Entrepreneur Relief works, who may qualify and what business owners should consider before selling.

What Is Revised Entrepreneur Relief?

Revised Entrepreneur Relief is an Irish tax relief that reduces the CGT rate on qualifying disposals of certain business assets.

The relief provides a 10% CGT rate on qualifying gains, compared with the standard CGT rate of 31% for most gains on disposals made on or after 7 October 2026.

It may be available to individuals selling qualifying shares in a trading company or certain business assets owned and used by a sole trader.

The relief applies to qualifying gains rather than automatically covering the entire sale proceeds. A chargeable gain is generally calculated by deducting the acquisition cost and allowable expenses from the disposal proceeds. Other relevant adjustments, losses and reliefs may also affect the final taxable gain.

The conditions must be satisfied before the reduced rate can be claimed.

What Is the Entrepreneur Relief Lifetime Limit in 2026?

From 1 January 2026, the lifetime limit for qualifying gains under Revised Entrepreneur Relief increased from €1 million to €1.5 million.

This is a lifetime limit, not an annual allowance. Qualifying gains from relevant disposals made on or after 1 January 2016 must be considered when calculating how much of the limit remains available.

For example, suppose a business owner has a qualifying gain of €1.2 million from a sale in 2026 and has not previously used any of the lifetime limit.

If the full gain qualifies for the relief, the CGT at 10% would be €120,000.

At the standard 31% rate, the CGT on the same gain would be €372,000. The illustrative difference would be €252,000.

This example assumes the entire gain qualifies and excludes other adjustments, reliefs and liabilities. The actual tax position will depend on the circumstances of the transaction.

If qualifying gains exceed the available lifetime limit, the excess generally falls outside the reduced-rate limit and is subject to the applicable standard CGT rules.

Who Qualifies for Revised Entrepreneur Relief?

Eligibility depends on the type of asset being sold and the seller’s circumstances. The requirements for selling company shares differ from those for disposing of a sole-trader business.

Selling shares in a trading company

For a qualifying share disposal, the individual generally must satisfy the following conditions:

• Minimum shareholding: Own at least 5% of the ordinary shares in the company or, where the relevant group conditions are met, a qualifying holding company.
• Ownership period: Have owned the relevant shares continuously for at least three years. The three-year period can fall at any time before the disposal.
• Director or employee requirement: Have served as a director or employee of the company or companies in a qualifying group.
• Working-time requirement: Have spent at least 50% of their working time in the service of the company or group in a managerial or technical capacity for a continuous period of at least three years during the five years immediately before the disposal.

The company must also meet the qualifying business requirements. A company principally holding investments or developing or letting land will not generally qualify as a trading business for this relief.

Where a holding company or group structure is involved, the activities of the relevant subsidiaries must also be considered. The fact that an individual owns shares in a company does not, by itself, establish eligibility.

Selling a sole-trader business

A sole trader may qualify when disposing of qualifying business assets that they own and use in their trade.

Generally, the assets must have been owned continuously for at least three years during the five years immediately before the disposal and must be used in a qualifying business.

The relief does not automatically apply to every asset associated with self-employment. The nature of the business, the ownership of the assets and how they have been used must be reviewed.

Which Assets Do Not Qualify?

Revised Entrepreneur Relief does not cover every asset connected with a business.

Revenue identifies several categories of disposals that generally do not qualify, including:

• Shares, securities and other assets held as investments, unless the shares meet the specific qualifying conditions.
• Development land.
• Assets on whose disposal no chargeable gain would arise.
• Assets personally owned outside a company, even where those assets are used by the company.
• Goodwill disposed of to a connected company.
• Shares or securities in a company where the individual remains connected with the company following the disposal.

There are limited exceptions to some of these restrictions, including circumstances involving genuine commercial reasons rather than tax avoidance. These exceptions require careful consideration of the facts.

This is particularly relevant to business owners who operate through multiple companies, own property personally or hold investment assets alongside their trading business.

Entrepreneur Relief vs Retirement Relief

Entrepreneur Relief is not the only tax relief that may be relevant when selling a business. Retirement Relief may also be worth considering, depending on the seller’s age, the buyer, the assets involved and the applicable ownership conditions.

The two reliefs have different eligibility requirements and limits.

Despite its name, Retirement Relief does not necessarily require someone to stop working completely. However, it has specific conditions relating to matters such as age, qualifying assets and the type of transfer.

A business owner should not assume that one relief will automatically provide a better outcome than the other. Reviewing the potential treatment under both provisions before agreeing a sale may help identify the appropriate approach.

How Can You Prepare for a Business Sale?

Tax planning should begin well before the sale agreement is finalised. Waiting until a transaction is nearly complete may leave limited time to address ownership or eligibility issues.

Consider the following steps:

• Review your ownership history. Confirm when you acquired the shares or business assets and whether the relevant holding periods are satisfied.
• Check your role in the company. Review your employment or directorship history and whether the working-time requirement has been met.
• Assess the business activities. Determine whether the company or group meets the qualifying business requirements.
• Calculate the potential gain. Establish the expected disposal proceeds, acquisition costs and allowable expenses.
• Review previous disposals. Check whether earlier qualifying gains have used part of your lifetime limit.
• Compare available reliefs. Consider whether Entrepreneur Relief, Retirement Relief or another provision may be relevant to the transaction.
• Review the proposed sale structure. Understand whether the transaction involves a sale of shares, business assets or another arrangement, as the tax treatment can differ.

Professional advice before a transaction can help identify potential issues while there is still time to review the proposed sale structure.

How Can We Help

Selling a business involves more than agreeing a price. Understanding your potential Capital Gains Tax liability and checking whether the relevant reliefs apply can help you make informed decisions before completing a transaction.

Richard O’Shea Consultancy can help business owners review their tax position, understand relevant CGT reliefs and plan for their tax obligations.

Explore our Capital Gains Tax services or Tax Consultation and Advisory Services to discuss your circumstances.

Final Thoughts

Revised Entrepreneur Relief can provide a valuable reduction in CGT for business owners selling qualifying assets. With the lifetime limit increasing to €1.5 million for qualifying disposals from 1 January 2026, it is worth reviewing whether the relief may apply before proceeding with a sale.

However, the reduced rate is conditional. Ownership history, business activities, shareholding requirements and previous qualifying gains can all affect eligibility.

Reviewing these factors early can help you understand your potential tax exposure and avoid relying on a relief that may not apply.

Disclaimer: This article provides general information and is not a substitute for professional tax advice. Eligibility should be assessed against the legislation and Revenue guidance applicable to the specific transaction.

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