IRISH TAX

you are a tax senior working in a large tax practical in Dublin. A client of yours, Sam, has provided you with the following information.

1. Sam who will turn on the 1st of may 2022 is married with grace. they have no children. Sam has been a working director of his family company for the past 20 years. He owns 80% of the voting rights of the company and plans to continue working in the company for the foreseeable future. His niece, Maria, has worked in the company for the past 15 years on a full time basis.

Sam is considering gifting some of his shares in the family company to Maria. The current market value of the shares he wants to gift to her is 4,000,000 euros. He is also considering selling some of his remaining shares to a third party. The market value of these shares is currently 600,000 euros. The market Value of all shares is expected to remain the same for the foreseeable future.

2. Sam's Wife, grace is a sole trader and has been in business for 5 years. She is considering incorporating her business as she has heard of the many benefits that are attached to incorporation including the potential availability of tax relief for start-up companies.

Sam and grace have asked you to provide taxation advice in relation to all of the above.

Requirements.

Prepare a report for Sam and grace detailing your advice in relation to capital gains tax and corporation tax.

your report should include advice in relation to;

1. Capital gains tax relief/exemption that Sam maybe be entitled to on the proposed gift to his niece, maria.

2. capital gains tax relief/ exemptions that sam may be entitled to on the proposed sales of shares to a third party.

3. Any potential clawbacks of any reliefs/exemptions which may be available.

4. The pros and cons associated with operating a business as a company as opposed to a sale sole trader.

5. Tax Relief for start-up companies and whether garce would be entitled to claim this if she does incorporate her business.