Fine Gael has pledged to slash the Capital Gains Tax rate to 10% on capital gains arising from new ventures, up to a limit of €10 million.

The promise raises the bar substantially on the CGT relief measure introduced in Budget 2016 and which took effect in January 2016. This provides for an entrepreneur’s CGT relief of 20% on net chargeable gains of up to €1 million. The standard rate of CGT is 33%.

It was unclear from the Fine Gael statement whether the promise will be an extension of the new entrepreneurs CGT relief, or a different measure that only applies to new ventures. It would seem to be the latter.

The FG statement promises to “cut the rate of Capital Gains Tax to 10% on gains arising on chargeable business assets acquired from January 1, 2017 and held for five years up to a maximum liability of €10 million”.

Taoiseach Enda Kenny said: “We have ambitious and credible plans to make Ireland an international startup hub because startups are vital in a small open economy like ours.

In Association with

International Centre

“Ireland has no shortage of talented and successful entrepreneurs but, compared to international competitors, we have an average level of new company start-ups. Our ambition is to make Ireland an international centre for startups.  We have clear and careful ways to do this and stake Ireland’s place.

“We will cut the rate of Capital Gains Tax to 10% on gains arising from next year and held for five years up to a maximum liability of €10 million.  We need to incentivise people to take the leap to create their own job and jobs for other people.”

Enterprise minister Richard Bruton claimed the FG incentive would increase the number of startups by 25% by 2020, or 3,000 more startups per year. “We also want to increase the survival rate of those startups by 25% a year, and improve the capacity of those survivors to grow to scale and expand in to larger scale exporters by 25%,” said Bruton.

“Under the Future Jobs Investment Fund we will provide additional capital funding and we will help support more High Potential Start-ups through Enterprise Ireland and the LEO network. We will also continue to support improved access to finance for start-ups through the Credit Guarantee Scheme and the Micro Finance Fund."