Passing On Your Business in Ireland: Retirement Relief and Business Relief Explained

Reviewed by the advisory team at Greenway Financial Advisors Ltd. · Dublin · Updated October 2026

For most company directors, the business is the biggest asset they own. Passing it on is also when the two big capital taxes meet. You may owe Capital Gains Tax because a gift is treated as a sale at market value. Your child may owe Capital Acquisitions Tax, Ireland’s gift and inheritance tax, on what they receive. This guide explains how the reliefs work for a family company in 2026, with a worked example.

The two taxes on a family business transfer

Capital Gains Tax, paid by you. When you give away shares, Revenue treats it as if you sold them at market value. The rate is 31% for disposals on or after 7 October 2026 (it was 33% before Budget 2027).

Capital Acquisitions Tax, paid by your child. Your child pays 33% on the value they receive above their Group A threshold. That threshold is €420,000 for gifts and inheritances taken on or after 7 October 2026, and it covers everything they receive from both parents over their lifetime.

Where both taxes arise on the same transfer, the Capital Gains Tax you pay can generally be credited against your child’s inheritance tax on the same property. The credit can be clawed back if your child disposes of the property within two years.

Retirement Relief: removing the Capital Gains Tax

Despite the name, you don’t have to retire to claim it. You need to be 55 or over, and the business needs to meet the conditions below.

These limits apply to transfers on or after 1 January 2025, and transfers to children from that date are added together. Above €10 million, the tax can be deferred, and it only becomes payable if your child disposes of the assets within 12 years. A niece or nephew can be treated as your child for this relief if they have worked full-time in the business for at least five years.

The main conditions for company shares:

• You have owned the shares for at least 10 years.
• You have been a working director for at least 10 years, and a full-time working director for at least five of them.
• It is a family company: you hold at least 25% of the voting rights yourself, or your family holds at least 75% and you hold at least 10%.
• The company is a trading company, not one that mainly holds investments or property.

The six-year clawback. If your child disposes of the shares within six years of the transfer, the relief is withdrawn and your child pays the tax that would have been due.

Business Relief: cutting your child’s inheritance tax by 90%

Business Relief reduces the taxable value of qualifying business property by 90%. On shares in a family trading company, it often means the transfer uses only a small part of your child’s €420,000 threshold.

• Ownership period. You need to have owned the business for five years before a gift, or two years before an inheritance on your death.
• Qualifying shares. Unquoted shares in a trading company qualify where, after the transfer, your child controls the company or has more than 25% of the voting rights. They can also qualify with at least 10% of the shares if your child has worked full-time in the company for the previous five years.
• Excluded businesses. Companies that deal mainly in shares, securities, land or buildings, or that make or hold investments, don’t qualify. Investment assets held inside a trading company can also be excluded from the relief.
• The six-year rule. The relief is withdrawn if the business stops trading or is sold within six years, unless the proceeds are reinvested in qualifying business property within a year.

A worked example

Seán is 62. He has owned 100% of his trading company for 20 years and has worked in it full-time throughout. The shares are worth €2.4 million and he paid very little for them. He gives all of them to his daughter, Aoife, who works in the business. Neither parent has given her anything before.

Without the reliefs, Capital Gains Tax alone could be around €740,000 at 31%, before any credit against Aoife’s inheritance tax. The planning point is that both reliefs depend on facts that take years to build: ten years of ownership, five years full-time, a trading company and a child who keeps the shares for six years.

Figures are illustrative and assume all conditions are met and the company holds no investment assets. Get advice on your own circumstances before acting.

Thinking about passing on your company in the next five to ten years? Call us on 01 853 2727. The earlier we look at it, the more options you have.

Selling instead: Revised Entrepreneur Relief

If you sell the business to someone outside the family, Revised Entrepreneur Relief can reduce Capital Gains Tax to 10% on the first €1.5 million of gains over your lifetime, for disposals on or after 1 January 2026. You generally need to have owned at least 5% of the shares for a continuous three years in the five years before the sale, and to have spent at least half your working time in the business.

Getting the timing right

1. Check the clock now. If you haven’t been a full-time working director for five years, or owned the shares for ten, the date you can transfer may be later than you think.
2. Clean up investment assets. Cash and investments inside the company can reduce the relief available. Decide what belongs in the business before the transfer.
3. Use your pension. Company pension contributions can take value out of the company tax-efficiently before the transfer. See our guide for company directors.
4. Plan for what’s left. A Section 72 policy can fund any inheritance tax your children face on the rest of your estate. See inheritance tax in Ireland.

General information for the 2026 tax year, using the Capital Gains Tax rate and inheritance tax thresholds that apply from 7 October 2026. Not personal advice. Sources: Revenue, Retirement Relief, Business Relief, Revised Entrepreneur Relief and stamp duty pages, and Tax and Duty Manuals 19-06-03 and 19-06-03b.