‘There is significant interest in tax planning’

TOM MAHON Managing Partner Warren & Partners

TAX ISSUES Next-generation planning has been at the fore of our clients’ minds over the last year. There is significant interest in tax planning, in terms of gift and inheritance tax, and the implementation of tax-efficient estate planning or the passing of business assets to family members while maximising CGT and CAT reliefs. We have found that business owners are progressing their succession planning after taking time to reflect on their own financial planning during the pandemic.

The domestic M&A market continues to be strong, and many business owners are considering pre-event tax planning and looking to restructure their business so that it is market-ready for a sale in the short to medium term. Furthermore, we have seen a significant increase in clients, typically serial entrepreneurs, investing in succession planning advice prior to establishing new businesses. From a tax compliance perspective, we have received a number of queries over the past 12 months from both SMEs and investors seeking clarity on the application of the EIIS. Since the scheme moved to self-certification, there has been some confusion and nervousness as to its application, particularly from investors.

TAX DEBT An amnesty is probably unlikely. However, as the tax warehousing periods come to an end, it is important that the government and Revenue continue to support businesses, so they are not pushed over a cliff edge. This is of particular relevance to the restaurant sector. It is key that businesses continue to meet their ongoing tax payment and filing obligations.

CAPITAL TAXES Whilst a reduction in the CGT rate may be unlikely, an increase in the lifetime limit of €1m for Entrepreneur Relief, or amending the lifetime limit so it is applied to each new ‘venture’, would be most welcome.

EXIT RELIEFS The €3m cap on the value of assets which can qualify for Retirement Relief for inter-family transfers of assets, and the requirement to transfer those shares before age 66 years, can trip up many business owners. Furthermore, there are intricacies around the interaction of Entrepreneur Relief and Retirement Relief, such as clawback periods. This is where obtaining good tax advice in a timely manner can really add value.