The recently released Tax Strategy Papers contains a wealth of information on the Irish tax system.  The examination of potential changes to Irish Capital Gains Tax (CGT) is particularly noteworthy.  There is discussion of a temporary rate cut, as well as consideration of abolishing entrepreneur's relief. 

The Tax Strategy Group (TSG) is comprised of senior officials and political advisers.  The TSG papers on tax policy are prepared annually, and outline options for the Budget. Ultimately, it is the Government who decides what policy will be implemented.  The most recent review takes place in the context of significant economic uncertainty, the Covid-19 pandemic and Brexit deadlines.  

In light of this, the TSG papers note that consideration could be given to some form of temporary CGT rate reduction. This would be as part of a set of tax-focused measures to deal with the Covid-19 disruption.  A time-limited lower rate of CGT for a period of one year may provide for a temporary stimulus and encourage economic activity.  The cost of such a change could be offset by restricting or abolishing existing CGT business reliefs, with the abolition of CGT entrepreneur relief and changes to the taxation of carried interest being highlighted.  The paper notes that there are ongoing doubts about the merits of broad based reliefs in terms of cost-benefits to the taxpayer.

Speculation about changes to the Irish CGT rate are a seasonal feature of the Irish budgetary process. This year's Budget will be announced on 13 October 2020.  Investors will be closely monitoring the Minister for Finance's public speeches in the interim for any indication as to a policy change. Investors seeking to access entrepreneur's relief may aim to conclude disposals prior to the 13 October Budget day.  Investors who consider that they may benefit from lower headline CGT rates, may be inclined to defer disposals until after any announcement.