The ITAA conference was told that entrepreneurial relief allows the first €1m of business sale proceeds to be taxed at 10pc, provided shares are held and the owner works in the business for three years.
Accountant David O’bBrien briefed memebrts on exit and succession management for thneir businesses, pointing out that tetirement relief offers up to €750,000 tax-free for business exits, requiring ten years of work in the business.
A holding company structure is beneficial for businesses valued above €2-3m, allowing tax-free proceeds to the holding company upon sale.
Winding up a business can be planned to extract cash tax-free, especially if excess cash is accumulated on the balance sheet.
Selling to a management team or third party can be tax-efficient, with proceeds under €750,000 potentially tax-free, or up to €1m at 10pc tax.
David O’Brien shared: “If your business is worth roughly over two, threem, then consider a holding company; if less, you’re fine with just having your trading company owned by the shareholders.”
“You can get your first €750,000 tax-free with retirement relief, but you need to have ten years working in the business to qualify.”
“If you’re planning to wind up, look at your pension, see if there’s scope to top it up, or leave excess cash on the balance sheet to extract tax-free.”
Paul Sexton shared: “The intensity of the negotiations, the scrutiny of the due diligence, and perhaps the hardest part of all was letting go.”
John Galligan shared: “The closer you get to the edge, the less you want to jump over it, but I thought, it’s taken me 50 years to figure out how to run a business, it’d be a shame to just close it up.”
