For business owners in Ireland, Budget 2027 brings two changes worth reviewing before a sale or family transfer: a lower standard Capital Gains Tax rate and higher tax-free thresholds for gifts and inheritances.
The CGT reduction is welcome, but modest. The tax outcome will also depend on the reliefs available, who receives the business and how the transaction is structured. Entrepreneur Relief, Retirement Relief and Business Relief each serve a different purpose.
Selling a business: the standard CGT rate falls to 31%
Revenue has confirmed that the standard Capital Gains Tax (CGT) rate reduces from 33% to 31% for disposals made on or after 7 October 2026.
On a taxable gain of €500,000, the reduction saves €10,000: CGT at 31% is €155,000, compared with €165,000 at 33%.
These figures assume the entire taxable gain is charged at the standard rate. Reliefs may reduce the liability further. Development land continues to attract a 33% rate.
The relevant disposal date also matters. For an unconditional contract, the CGT disposal date is generally the date the contract is made, rather than the later completion date. Conditional contracts can follow different rules. Owners with a transaction already underway should check which rate applies.
Entrepreneur Relief: check your remaining lifetime allowance
Revised Entrepreneur Relief provides a 10% CGT rate on qualifying business gains, subject to a lifetime limit of €1.5 million for disposals from 1 January 2026.
The increase came from Finance Act 2025. Budget 2027 did not announce changes to the existing Entrepreneur Relief or Retirement Relief limits, subject to Finance Bill 2026.
The limit applies to qualifying gains, rather than the sale price. Earlier qualifying disposals made on or after 1 January 2016 also count towards the available allowance.
Eligibility depends on ownership, the nature of the business and the owner’s working role. Investment assets and development land are excluded, and company group structures need careful review.
For owners who qualify, the 10% rate can have a greater impact than the two percentage point reduction in standard CGT. The remaining lifetime allowance should be checked before estimating the net proceeds from a sale.
Passing on a family business: higher CAT thresholds
Capital Acquisitions Tax (CAT) is the tax that can arise for someone receiving a gift or inheritance.
Revenue has confirmed that the following thresholds apply to gifts and inheritances taken on or after 7 October 2026:
| Threshold | 2 October 2024 to 6 October 2026 | From 7 October 2026 |
|---|---|---|
| Group A, generally including children | €400,000 | €420,000 |
| Group B, generally including siblings, nieces, nephews and grandchildren | €40,000 | €44,000 |
| Group C, generally other relationships | €20,000 | €22,000 |
The correct group depends on the relationship and any applicable special rules.
These are cumulative thresholds. Previous taxable gifts and inheritances within the same group since 5 December 1991 must be taken into account.
The CAT rate remains 33%. For a child with the full Group A threshold available, the additional €20,000 can reduce CAT by up to €6,600 where the taxable benefit exceeds the new threshold.
Business Relief can reduce the value subject to CAT
For a qualifying gift or inheritance of business property, Business Relief can reduce its taxable value by 90%.
For example, qualifying business property worth €3 million could have a taxable value of €300,000 after Business Relief, before applying the beneficiary’s available CAT threshold.
The relief is conditional and does not apply automatically to every business asset or shareholding.
The person passing on the relevant property generally needs to have owned it for five years before a gift, or two years before an inheritance taken on their death. A spouse’s period of ownership can count towards the five-year ownership requirement.
Relief can also be withdrawn. For current transfers, a disposal or cessation of trading within six years of the valuation date can trigger a clawback, subject to exceptions, including qualifying replacement property rules.
A family planning to transfer a business and sell it shortly afterwards should review these conditions before proceeding.
Retirement Relief: review the owner’s CGT position
A lifetime gift of a business can create a CGT liability for the person making the gift, even if no money changes hands. CGT generally uses market value for a gift.
Retirement Relief may reduce or eliminate that liability for an eligible owner. Despite its name, the owner does not have to retire.
Under the rules applying from 1 January 2025, qualifying transfers to a child have a €10 million Retirement Relief limit for owners aged 55 to 69, reducing to €3 million for owners aged 70 or over.
For owners aged 55 to 69, where the qualifying transfer exceeds the €10 million limit, the parent’s CGT on the excess can be deferred. The deferred CGT is assessed on the child if the child disposes of the assets within 12 years and falls away if the assets are retained for at least 12 years.
For qualifying disposals outside the family, the lifetime limits are €750,000 for owners aged 55 to 69 and €500,000 for those aged 70 or over. These limits concern disposal value, rather than the gain. Marginal relief may apply above them.
Age, ownership history and the qualifying assets must all be considered. For transfers to a child within the €10 million limit, a disposal by the child within six years can trigger a clawback of Retirement Relief.
For transfers where CGT on the excess above €10 million has been deferred, a disposal within 12 years can cause the deferred CGT to be assessed on the child.
Retirement Relief addresses the owner’s CGT position. Business Relief addresses the recipient’s CAT position. Both need to be assessed when planning a family transfer.
Planning a business sale or succession?
Before agreeing a sale or transfer, review the business valuation, relevant dates, available reliefs and any previous use of lifetime allowances. The proposed structure, other taxes such as Stamp Duty, and the recipient’s future plans also need to be considered.
Whether you are preparing to sell your business or pass it to the next generation, early advice can help you understand the tax cost and the conditions attached to available reliefs.
Contact the ECOVIS Ireland team to discuss your business sale or succession plans.
+353 1 823 0000
info@ecovis.ie
This article reflects Revenue guidance available on 13 October 2026. This is general information. The treatment of an individual transaction depends on its circumstances and should be reviewed with a tax adviser.
