Wednesday, June 27, 2018
As published in The Times, June 2018.
The Law Society of Ireland has urged the government to reduce taxes for entrepreneurs and for people buying and selling shares. In its pre-budget submission, the organisation said that the cap on so-called entrepreneurs relief should be raised. The measure, which was introduced several years ago, allows people buying or selling businesses to pay a 10 per cent rate of capital gains tax compared with the normal rate of 33 per cent. The maximum value of this relief is €1 million, after which the normal rate of capital gains tax applies.
Several bodies have said that Ireland should look to raise the value of this relief to compete with other jurisdictions and make the country more attractive for people trying to start a business. In its submission the Law Society said: “We would suggest that the cap on relief at a lifetime threshold of €1 million should be increased so as to match comparative jurisdictions. The UK cap is currently £10 million (€11.3 million)”. It also said that the rate of stamp duty that applied when shares in a business were bought or sold should be halved from its rate of 1 per cent to 0.5 per cent. “We would recommend that to ensure ongoing investment in Irish companies that the stamp duty rate on such transfers is reduced to 0.5 per cent in line with the stamp duty rate in the UK,” the Society’s submission said.
The Law Society also said that it wanted better consultation from the government about any big tax changes that were likely to be introduced. It cited the example of stamp duty on commercial property, which last year was increased from 2 per cent to 6 per cent.
Gavin McGuire, the Chairman of the Law Society’s taxation committee, said: “A number of significant material changes were introduced in the finance bill 2017 without any opportunity for proper consultation with experts. Of particular concern to solicitors and their clients in 2017 was the late introduction of changes to stamp duty for non-residential property.”
The Law Society said that it recommended “a formal technical consultation period” before tax changes were introduced.
Ibec, the business lobby group that represents many of Ireland’s largest companies, also gave some detail of its pre-budget submission, which is due to be launched in full on Monday.
It said that a “suite of targeted measures” should be introduced, including an overhaul of capital gains tax, the creation of a “meaningful” staff stock ownership scheme and a response to address what it described as a “crisis” in higher education funding.