Irish travel agencies face consolidation as larger groups acquire smaller operators and owners approach retirement. Many businesses now require preparation for sale, succession to family or management, or orderly wind-up. Tax rules offer significant reliefs that reduce or eliminate capital gains tax on exit, but qualification conditions apply and planning must start years in advance.
Dave O’Brien told the annual conference of the Irish Travel Agents Association in Alcobaca in Portugal that agencies valued below €2-3 million generally need only a simple trading company structure owned directly by the shareholders. Above that level a holding company becomes useful to move sale proceeds tax-free before eventual extraction. He outlined four main exit routes: transfer to family, management buy-out, third-party sale, or planned liquidation.
Entrepreneur relief taxes the first €1 million of lifetime gains at 10 percent provided shares have been held for three years. Retirement relief can deliver proceeds up to €750,000 completely tax-free (or €3 million in certain family transfers) if the owner is over 55 and has worked in the business for ten years. Liquidation or management buy-out using cash on the balance sheet can also extract substantial sums tax-free when structured correctly.
Agencies planning any exit should review customer concentration, debtor days, management strength, and owner involvement at least five years ahead. Buyers favour businesses with recurring revenue, low staff turnover, and owners who have already stepped back from daily operations. Early professional valuation helps decide whether to build for sale, maximise cash for wind-up, or prepare for internal succession.
Key takeaways include the availability of 0-10 percent effective tax rates on exit for qualifying owners, the need for multi-year preparation regardless of route chosen, and the importance of simple structures for smaller agencies versus holding companies for larger ones.
“If you’re less than that the vast majority of businesses are going to be less than that, then you’re fine with just having your trading company owned by the shareholders and ignore any noise that people will talk to you over holding companies. Your first one million could be taxed at 10pc. So it’s €1 million in proceeds would be taxed at 10pc, up to 1 million. If it’s less than €750,000 value, you’re paying 0pc tax on those proceeds.”
