CGT reform ‘must follow business-friendly package’

Real reform on capital gains tax for entrepreneurs in next October’s budget needs to be one of the follow-on policies from yesterday’s package of programmes, which were broadly viewed as being friendly to the small business community.

Backing up his claim that SMEs were the lifeblood of the economy, Michael Noonan touched on a range of initiatives for the sector yesterday, including a re-launch of the disappointing Seed Capital scheme, to be renamed the Start-Up Relief for Entrepreneurs scheme; improvements to the remit of the Credit Review Office (which will soon see loans by Permanent TSB and potentially, Ulster Bank qualify for review); improving the Foreign Earnings Deduction; and the imminent launch of the Strategic Banking Corporation of Ireland, the State’s new so-called SME Bank.

Importantly, the three-year corporation tax relief for start-up firms is to be extended, and improvements have been made to the Employment and Investment Incentive Scheme (EIIS), increasing the amount of finance that a company can raise to €5m per annum, subject to a lifetime cap of €15m.