Retirement Relief – CGT (Capital Gains Tax)

We have provided below a quick synopsis of the recent changes to Retirement Relief in Finance Act 2014.

Capital Gains Tax retirement relief applies normally where a person over the age of 55 years transfers qualifying assets which are part of a trade or a business or held by a family company carrying on a trade or business. This is a substantial relief and depending on the circumstances, you could avoid any Capital Gains Tax liability.

This relief can also apply to farmers in respect of the disposal of land etc. – including land that has been let in certain situations.

This beneficial relief has been amended in Finance Act 2014 to ensure Retirement Relief applies when transferring land to active farmers. For disposals to a child on or after 01 January 2015, land that was previously farmed for a minimum of 10 years and is subsequently let for up to 25 years may now qualify for retirement relief.


Since Finance (No2) Act 2013, farmers who let their land for periods less than 5 consecutive years and who eventually dispose of their land to a third party (other than a “child” of the disponer) were not allowed retirement relief. However any disposals made on or after 1 January 2015 by these categories of farmers now have a chance to benefit from CGT retirement relief, provided they fulfill the other conditions of the relief in S598 TCA 1997 and they either:


          dispose of their land on or before 31 December 2016, or

          lease their land on or before 31 December 2016 for minimum periods of 5 years (up to a maximum of 25 years) and ultimately dispose of the land.


The above is a general commentary on the changes in Finance Act 2014 to the rules of CGT Retirement Relief.  The tax implications of specific cases will depend on individual circumstances. If you think the above might be relevant for you, specialist advice should be obtained.


OMB, Chartered Accountants has considerable experience in this area and we would be happy to discuss the various issues with you.