Entrepreneur Tax Relief in Ireland

Entrepreneur Relief in Ireland is a financial incentive that can significantly benefit business owners and entrepreneurs. Understanding entrepreneur tax relief is crucial for optimising your financial strategy, whether you are a seasoned entrepreneur or just starting your business journey. Our taxation services team provides expert guidance to ensure you take full advantage of available reliefs.

What is Entrepreneur Relief in Ireland?

Entrepreneur Relief offers a reduced rate of capital gains tax (CGT) for individuals who invest time and effort into growing and running their businesses. It applies to qualifying business assets, allowing owners to pay CGT at a lower rate when disposing of shares or business interests. The relief rewards active involvement in a business. It's designed to encourage entrepreneurship and business development across Ireland.

Read our article on ‘What is capital gains tax?’ to learn more about this.

Tax Benefits and Budget 2026 Updates

One of the primary benefits of entrepreneur tax relief in Ireland is the reduced CGT rate. As of Budget 2026, the rate remains at 10%, significantly lower than the standard CGT rate of 33%.

A major update in Budget 2026 is that the lifetime limit for Entrepreneur Relief has been increased from €1 million to €1.5 million. This allows business owners to benefit from relief on larger gains. It provides greater incentive for long-term investment and growth. Revenue.ie – Entrepreneur Relief Click here to learn about more tax incentives for businesses in Ireland.

Qualifying for Entrepreneur Relief

To qualify for entrepreneur tax relief, you must meet specific criteria:

1. Ownership:

You should own at least 5% of the ordinary share capital of the company.

2. Director/Employee:

You must be a director or employee of the company who spends/has spent more than 50% of your time in the company.

3. Active Involvement:

You need to be actively involved in the business's management for at least three years out of five, leading up to the disposal of assets.

4. Holding Period:

The shares must have been held for at least three years. It’s also important to understand the implications of entrepreneur relief liquidation. If a company is being liquidated, certain conditions apply to ensure the relief can still be claimed. Business owners should consult with professional advisors to assess the impact of liquidation on their relief entitlement.

Example of Entrepreneur Relief in Ireland

Let us illustrate Entrepreneur Relief in Ireland with a practical example:

John, an entrepreneur, owns 10% of the shares in his software development company, XYZ Tech Ltd. He has been actively involved in the company for the past five years. John decides to sell his shares, resulting in a capital gain of €200,000.

Without Entrepreneur Relief:

CGT at the standard rate (33%): €66,000

With Entrepreneur Relief:

CGT at the reduced rate (10%): €20,000 Thanks to the updated lifetime limit under Budget 2026, gains up to €1.5 million can now qualify for relief. This allows substantial savings for larger disposals.

Entrepreneur Relief in Ireland remains a key incentive for business owners. The Budget 2026 updates make it even more attractive. It rewards individuals who actively participate in their business’s growth and development. The increase in the lifetime limit to €1.5 million provides greater potential savings and reinforces the government’s commitment to supporting entrepreneurs. If you meet the eligibility criteria, this relief can result in significant tax savings when selling or transferring qualifying business assets. You can visit Revenue.ie to keep up to date with any changes to entrepreneur tax relief.

It’s essential to note that this is an overview of Entrepreneurs' Relief, and specific conditions and qualifications apply. Our taxation services team can guide you through eligibility, calculation, and planning strategies for claiming entrepreneur tax relief. Contact us today to ensure you maximise your benefits and remain fully compliant with Revenue requirements. Learn more about our services and schedule a consultation with our experienced professionals. Your financial success is our priority.