Joe Flaherty (Longford-Westmeath, Fianna Fail) | Oireachtas source

We are speaking a lot about taxation. I want to address the issue of capital gains tax retirement relief changes to be made under section 55 of the Finance Bill 2024. I welcome aspects of the changes, in particular the €10 million limit, which will not now come into effect until 1 January 2025. I would suggest, however, that a small number of changes could be made that would significantly improve the operation of this scheme. I ask that the Minister give consideration to the deferral. It should be rolled over where there is a subsequent onward gift that would also qualify for deferral under this subsection. This transfer from the child to the grandchild should not trigger a tax liability. Second, the amount assessed and charged under subsection (4A)(d) should be limited to an amount calculated to the actual proceeds received on disposal. The example could be if the transferred assets were to be severely diminished or liquidated as part of an administration or forward sale. Third, and finally, the necessity to claim the full abatement after 12 years in a tax return is overly burdensome, does not necessarily serve a policy purpose and should be deleted.

As I said, I welcome the changes as regards the €10 million; however, I have concerns that the clawback period of 12 years appears very long. Such a holding period would, I fear, impede the orderly development of the business. Also, it is significantly longer than the period in play for our neighbours in the UK, and there is a concern that it might force some family businesses to look at moving their ownership base from here to overseas. The kernel of the ask is that the Minister look at that and, ideally, move from a 12-year period to a six-year period.

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