What Is CAT Business Relief?

CAT Business Relief is provided under the Capital Acquisitions Tax Consolidation Act 2003 (CATCA 2003). It reduces the taxable value of a qualifying business or company shares by 90% before Capital Acquisitions Tax (CAT) is calculated. At the standard CAT rate of 33%, that reduction can translate into very substantial savings.

What Qualifies?

Business Relief applies to genuine trading businesses — sole traders, partnership interests, and unquoted company shares. The key conditions are:

• The business must be a trading business (investment-holding or property-letting businesses generally do not qualify)
• The business must have been owned for at least 5 years before a lifetime gift, or 2 years before it passes on death
• For company shares, the recipient must hold more than 25% of voting rights after the transfer, or at least 10% of shares having worked full-time in the business for 5 years

Watch Out for the Clawback

If the recipient sells the business within 6 years of receiving it and does not reinvest in qualifying business property within one year, Revenue will claw back the relief in full.

Start Planning Early

CAT Business Relief is one of the most powerful reliefs in Irish tax law — but timing, business structure, and asset composition all affect whether you qualify. Early planning with a tax adviser is essential to make the most of it.