Tax Planning for Irish Business Owners Approaching Retirement

Introduction

As an Irish business owner, approaching retirement brings both exciting opportunities and complex decisions. Whether you’re selling your business, passing it on to family, or stepping away gradually, proactive tax planning can make a significant difference in securing your financial future and minimizing tax liabilities.

In this guide, we’ll explore key tax reliefs and strategies available to Irish business owners preparing for retirement.

1. Maximise Retirement Relief on Business Disposals

One of the most beneficial reliefs available to retiring business owners in Ireland is Retirement Relief. Despite the name, this relief is not contingent on you retiring completely but rather on your age and the disposal of certain business assets.

Who Qualifies?

You must be aged 55 or over at the time of the disposal.
The assets must be qualifying business assets, such as shares in a family company or land and buildings used in the trade.

Relief Limits

Disposals to children: You can transfer qualifying business assets with no Capital Gains Tax (CGT) liability, regardless of the value.
Disposals to others: Full relief is available for disposals up to €750,000. If you are aged 66 or over, the threshold reduces to €500,000.

Pro Tip: If you’re planning to dispose of assets to someone other than a child, consider doing so before your 66th birthday to take advantage of the higher relief threshold.

👉 Learn more about Retirement Relief on Revenue.ie.

2. Take Advantage of Revised Entrepreneur Relief

If you dispose of a business and don’t qualify for Retirement Relief, you may be eligible for Revised Entrepreneur Relief, which reduces your Capital Gains Tax rate from the standard 33% to 10% on qualifying business disposals.

Who Qualifies?

You must own at least 5% of the shares in a trading company.
You must have spent a minimum of three years working full-time in the business in the previous five years.
The relief applies to disposals up to a lifetime limit of €1 million in chargeable gains.

Pro Tip: Maintain detailed records of your shareholding and your role in the business to ensure a smooth application for relief.

👉 Learn more about Entrepreneur Relief on Revenue.ie.

3. Plan for Succession with Business Relief (CAT)

If you are planning to pass your business on to your children or another successor, Business Relief can significantly reduce Capital Acquisitions Tax (CAT).

How it Works:

Business Relief reduces the taxable value of the business assets by 90%, making it much more affordable for your successor to take over.
This applies whether the transfer is made as a gift or inheritance.
Certain conditions apply: the business must be actively trading, and your successor must retain the business for a specified period (usually six years).

Pro Tip: Early planning ensures that you and your successor meet the qualifying conditions for this relief.

👉 Learn more about Business Relief on Revenue.ie.

4. Maximise Your Pension Contributions Before Retirement

Pension contributions offer one of the most tax-efficient ways to prepare for retirement. Contributions made to approved pension schemes are eligible for income tax relief at your marginal rate.

Age-Based Contribution Limits (2025):

Up to age 39: 15% of net relevant earnings
40-49: 25%
50-54: 30%
55-59: 35%
60 and over: 40%

The earnings limit for pension contribution relief in 2025 is €115,000.

Pro Tip: Consider Additional Voluntary Contributions (AVCs) to top up your retirement savings and maximize your tax relief.

👉 Learn more about Pension Contributions and Tax Relief on Revenue.ie.

5. Timing Is Everything: Plan Your Exit Wisely

The timing of your business disposal or transfer can have a substantial impact on the tax you pay.

Exiting your business before age 66 allows you to access higher Retirement Relief thresholds.
Selling your business in a tax year when your personal income is lower can reduce income tax liabilities.

Pro Tip: Consider phasing your retirement over several years, which may help spread the tax impact and ease the transition for both you and your business.

👉 Related Read: Tax Planning Strategies for Irish Businesses

6. Clear Outstanding Liabilities Before You Retire

Before handing over the reins, ensure your business is in good standing with Revenue.

Settle any outstanding VAT, PAYE/PRSI, and Corporation Tax liabilities.
Complete any Revenue audits or compliance reviews to ensure the business is free from tax risks for future owners.

Pro Tip: A clean compliance record not only avoids penalties but also makes your business more attractive to potential buyers or successors.

7. Review Your Estate Plan

For many business owners, retirement coincides with the need for estate planning.

Draft or update your Will to reflect your business succession plans.
Consider setting up Trusts to protect family assets.
Use Capital Acquisitions Tax (CAT) thresholds and reliefs like Business Relief to minimize inheritance tax liabilities.

Pro Tip: Book an appointment with Intax to align your estate plan with your retirement strategy and family goals.

Conclusion

As you approach retirement, early and thoughtful tax planning can help secure your financial future, reduce tax liabilities, and ensure a smooth transition for your business. Whether you’re selling, transferring, or winding down, taking advantage of reliefs like Retirement Relief, Entrepreneur Relief, and Business Relief can make a significant difference.

✅ Partner with Intax.ie for Expert Tax Planning Support

At Intax.ie, we understand the complexities of retirement planning for Irish business owners. Our tailored tax strategies ensure you maximize reliefs, minimize liabilities, and secure your legacy.📞 Contact us today for a consultation.