Taxation and you must use Ireland taxation to do this essay

Taxation and you must use Ireland taxation to do this - Essay Example Failure to retain it, it will expose Sonya to parents original CGT that was evaded by Retirement Relief and any CGT liability on their own disposal. This implies that there will be no capital gains tax liability when Tom transfers the business to Sonya. Disposal of shares in family trading company to Sonya will require standard qualifying conditions, control voting rights requirement and working directorship for 10 year and 5 year periods. Sonya must also own 25% or more of the voting rights in the company or own 10% or more of the voting rights in the company. In addition, the family must own 75% or more which includes the individual’s own 10% throughout the 10 year qualifying period. ii) The transfer of the business to the local businessman is also qualifying since Sonya is above 55 years and it involves the transfer of shares in the family trading company. Disposal to others are exempt from CGT if the gross sales proceeds from qualifying assets during the individual’s lifetime from the age of 55 onwards does not exceed â‚ ¬750,000. In the case of sale to the local businessman, the amount of 850,000 exceeds the set limit of 750,000. The capital gains tax liability will be calculated as follows b) If Tom transfers his business to his daughter, there will be no capital gains tax liability, but when he sells the business to the local businessman there is a capital gains tax liability of 50,000. This can be analyzed in the sense that an increase in the capital gains tax liability minimizes tax liabilities. Therefore, Tom should consider selling the business to the local businessman so that he can minimise the tax liabilities. It will also help to minimise the requirements of directorship and control of voting rights. There is no consideration if Sonya agrees with Tom to take over the business now since it is within the family and she has worked for 5 years plus the current year. However, if Sonya