With no entirely new incentives introduced in Finance Bill 2025, extensions and tweaks to some existing reliefs were the headline items for Ireland’s entrepreneurial community.
The Bill provides a welcome enhancement to the Capital Gains Tax (CGT) Entrepreneur Relief, increasing the lifetime limit for qualifying gains from €1 million to €1.5 million, effective from 1 January 2026. This measure allows business owners who dispose of qualifying shares or assets to pay CGT at a reduced 10% rate on the first €1.5 million of qualifying gains, provided the required ownership and active management conditions are met.
This change, though modest, is a meaningful improvement for business founders and owner managers looking to realise value or transition ownership. We welcome this upward adjustment to the lifetime limit, which helps narrow the gap between Ireland and other jurisdictions offering more generous entrepreneur incentives. However, there remains scope for further enhancement in future budgets if Ireland wishes to remain fully competitive in attracting entrepreneurial investment.
In the agricultural sector, the Bill expands the CGT Farm Restructuring Relief and extends its availability to 31 December 2029. The relief applies where a farmer sells, exchanges, or purchases land in order to consolidate holdings and improve operational efficiency.
The updated provisions now include transactions involving commercial woodland and non-commercial woodland where the land is used for sustainability and biodiversity purposes. This marks a timely evolution of the scheme, recognising the increasing focus on environmental stewardship within farming and land use policy.
The entrepreneurship and capital taxes measures in Finance Bill 2025 were conspicuous by their absence. Headline rates remain the same and there was no indexation of CAT thresholds
By enhancing Entrepreneur Relief and extending Farm Restructuring Relief, the Bill provides some incremental relief which is to be welcomed.
There is, no doubt, room for more ambitious reforms to incentivise risk taking and support investment. it is a case of “watch this space” in the remining years of this current Government to see what they can come up with.
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Author: Mike Scanlon
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