Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank the Senator for his colourful suggestions and he makes a valid point. The relief will not apply to disposals of chargeable business assets by companies or to disposals of development land - which I know is an issue raised by Senators in this House - or to a business dealing in or developing land, or to a business consisting of letting land or building or holding investments.

Where a qualifying business is carried on by a private company, individuals seeking to qualify for the relief must own not less than 5% of the shares in the company or at least 5% of the shares in a holding company whose business consists wholly, or mainly, of holding shares in its 51% of subsidiaries, and those subsidiaries are wholly, or mainly, carrying out the qualifying business.

The shareholder must also have been a working director or an employee of a qualifying business company or group of companies for a continuous period of three years within the five-year period immediately prior to the disposal of the chargeable business assets. This entrepreneurship provision in the Bill is obviously replacing an earlier provision which only allowed relief on a second disposal. It was also subject to considerable restrictions and, it is fair to say from our engagement with entrepreneurs and the business community, was seen to be ineffective.

This new provision allows relief so entrepreneurs can invest in a new venture. While there may be some who do not re-invest their gains, this is not considered in our view to be a significant issue for people who are clearly serial entrepreneurs.