{"id":10874,"date":"2022-04-16T12:53:14","date_gmt":"2022-04-16T12:53:14","guid":{"rendered":"http:\/\/legalblog.ie\/?p=10874"},"modified":"2024-03-31T21:22:31","modified_gmt":"2024-03-31T21:22:31","slug":"corporate-groups","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/corporate-groups\/","title":{"rendered":"Corporate Groups"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Groups\" title=\"Groups\">Groups<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Requirement_for_Relief\" title=\"Requirement for Relief\">Requirement for Relief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Reorganistions\" title=\"Reorganistions\">Reorganistions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#CGT_Groups\" title=\"CGT Groups\">CGT Groups<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Transfer_of_Assets\" title=\"Transfer of Assets\">Transfer of Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Leaving_the_group\" title=\"Leaving the group\">Leaving the group<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Artificial_Use_of_Losses\" title=\"Artificial Use of Losses\">Artificial Use of Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/corporate-groups\/#Transfers_to_and_from_Stock\" title=\"Transfers to and from Stock\">Transfers to and from Stock<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#TAXES_CONSOLIDATION_ACT\" title=\"TAXES CONSOLIDATION ACT\">TAXES CONSOLIDATION ACT<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Shares_and_securities_ss_580-592\" title=\"Shares and securities (ss. 580-592)\">Shares and securities (ss. 580-592)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Shares_securities_etc_identification\" title=\"Shares, securities, etc: identification.\">Shares, securities, etc: identification.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Disposals_of_shares_or_securities_within_4_weeks_of_acquisition\" title=\"Disposals of shares or securities within 4 weeks of acquisition.\">Disposals of shares or securities within 4 weeks of acquisition.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Calls_on_shares\" title=\"Calls on shares.\">Calls on shares.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Capital_distributions_by_companies\" title=\"Capital distributions by companies.\">Capital distributions by companies.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Reorganisation_or_reduction_of_share_capital\" title=\"Reorganisation or reduction of share capital.\">Reorganisation or reduction of share capital.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Conversion_of_securities\" title=\"Conversion of securities.\">Conversion of securities.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Company_amalgamations_by_exchange_of_shares\" title=\"Company amalgamations by exchange of shares.\">Company amalgamations by exchange of shares.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Company_reconstructions_and_amalgamations\" title=\"Company reconstructions and amalgamations.\">Company reconstructions and amalgamations.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Demutualisation_of_assurance_companies\" title=\"Demutualisation of assurance companies.\">Demutualisation of assurance companies.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Shares_in_close_company_transferring_assets_at_undervalue\" title=\"Shares in close company transferring assets at undervalue.\">Shares in close company transferring assets at undervalue.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Relief_for_individuals_on_certain_reinvestment\" title=\"Relief for individuals on certain reinvestment.\">Relief for individuals on certain reinvestment.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Dividends_paid_in_connection_with_disposals_of_shares_or_securities\" title=\"Dividends paid in connection with disposals of shares or securities.\">Dividends paid in connection with disposals of shares or securities.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Companies_Chargeable_Gains_ss_614-629C\" title=\"Companies&#8217; Chargeable Gains (ss. 614-629C)\">Companies&#8217; Chargeable Gains (ss. 614-629C)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#General\" title=\"General\">General<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Capital_distribution_derived_from_chargeable_gain_of_company_recovery_of_tax_from_shareholder\" title=\"Capital distribution derived from chargeable gain of company: recovery of tax from shareholder.\">Capital distribution derived from chargeable gain of company: recovery of tax from shareholder.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Company_reconstruction_or_amalgamation_transfer_of_assets\" title=\"Company reconstruction or amalgamation: transfer of assets.\">Company reconstruction or amalgamation: transfer of assets.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Groups_of_companies_interpretation\" title=\"Groups of companies: interpretation.\">Groups of companies: interpretation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transfers_of_assets_other_than_trading_stock_within_group\" title=\"Transfers of assets, other than trading stock, within group.\">Transfers of assets, other than trading stock, within group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transfers_arising_from_certain_mergers_under_Companies_Act_2014\" title=\"Transfers arising from certain mergers under Companies Act 2014.\">Transfers arising from certain mergers under Companies Act 2014.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transfers_of_trading_stock_within_group\" title=\"Transfers of trading stock within group.\">Transfers of trading stock within group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Disposals_or_acquisitions_outside_group\" title=\"Disposals or acquisitions outside group.\">Disposals or acquisitions outside group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Replacement_of_business_assets_by_members_of_group\" title=\"Replacement of business assets by members of group.\">Replacement of business assets by members of group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Deemed_disposal_in_certain_circumstances\" title=\"Deemed disposal in certain circumstances.\">Deemed disposal in certain circumstances.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Depreciatory_transactions_in_group\" title=\"Depreciatory transactions in group.\">Depreciatory transactions in group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Dividend_stripping\" title=\"Dividend stripping.\">Dividend stripping.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Company_ceasing_to_be_member_of_group\" title=\"Company ceasing to be member of group.\">Company ceasing to be member of group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transitional_provisions_in_respect_of_section_623\" title=\"Transitional provisions in respect of section 623.\">Transitional provisions in respect of section 623.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Exemption_from_charge_under_section_623_in_case_of_certain_mergers\" title=\"Exemption from charge under section 623 in case of certain mergers.\">Exemption from charge under section 623 in case of certain mergers.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Shares_in_subsidiary_member_of_group\" title=\"Shares in subsidiary member of group.\">Shares in subsidiary member of group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transitional_provisions_in_respect_of_section_625\" title=\"Transitional provisions in respect of section 625.\">Transitional provisions in respect of section 625.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Tax_on_company_recoverable_from_other_members_of_group\" title=\"Tax on company recoverable from other members of group.\">Tax on company recoverable from other members of group.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Restriction_on_set-off_of_pre-entry_losses\" title=\"Restriction on set-off of pre-entry losses.\">Restriction on set-off of pre-entry losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Exemption_from_tax_in_the_case_of_gains_on_certain_disposals_of_shares\" title=\"Exemption from tax in the case of gains on certain disposals of shares.\">Exemption from tax in the case of gains on certain disposals of shares.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Treatment_of_assets_related_to_shares\" title=\"Treatment of assets related to shares.\">Treatment of assets related to shares.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Mergers_divisions_transfers_of_assets_and_exchanges_of_shares_concerning_companies_of_different_Member_States_ss_630-638\" title=\"Mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (ss. 630-638)\">Mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (ss. 630-638)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transfer_of_assets_generally\" title=\"Transfer of assets generally.\">Transfer of assets generally.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Transfer_of_assets_by_company_to_its_parent_company\" title=\"Transfer of assets by company to its parent company.\">Transfer of assets by company to its parent company.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Company_reconstruction_or_amalgamation_transfer_of_development_land\" title=\"Company reconstruction or amalgamation: transfer of development land.\">Company reconstruction or amalgamation: transfer of development land.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Formation_of_SE_or_SCE_by_merger_%E2%80%93_leaving_assets_in_the_State\" title=\"Formation of SE or SCE by merger &#8211; leaving assets in the State.\">Formation of SE or SCE by merger &#8211; leaving assets in the State.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Formation_of_SE_or_SCE_by_merger_%E2%80%93_not_leaving_assets_in_the_State\" title=\"Formation of SE or SCE by merger &#8211; not leaving assets in the State.\">Formation of SE or SCE by merger &#8211; not leaving assets in the State.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Treatment_of_securities_on_a_merger\" title=\"Treatment of securities on a merger.\">Treatment of securities on a merger.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Credit_for_tax\" title=\"Credit for tax.\">Credit for tax.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Avoidance_of_tax\" title=\"Avoidance of tax.\">Avoidance of tax.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Returns\" title=\"Returns.\">Returns.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-55\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Other_transactions\" title=\"Other transactions.\">Other transactions.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-56\" href=\"https:\/\/legalblog.ie\/corporate-groups\/2\/#Apportionment_of_amounts\" title=\"Apportionment of amounts.\">Apportionment of amounts.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Groups\"><\/span>Groups<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Capital gains tax reliefs exist to cater for the fact that businesses are often organised in groups of companies. \u00a0A group of companies under Company Law comprises a holding company and one or more layers of subsidiaries<\/p>\n<p>Companies are said to be in the same group when one is a parent or subsidiary of another (either directly or indirectly )or both are subsidiaries of another company).<\/p>\n<p>Having different companies can be useful from a business organisational perspective.\u00a0 The trading risk associated with the business may be isolated within a single company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Requirement_for_Relief\"><\/span>Requirement for Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Transfers between companies may raise capital gains tax issues. As set out in other chapters, there are favourable reliefs from corporation tax in respect of the payments between group companies.<\/p>\n<p>All things being equal, a transfer between two connected companies is deemed to be a sale at open market value.\u00a0 The\u00a0 capital gains arising since the company acquired the asset would be chargeable but for relief.\u00a0 For this reason, there exist reliefs to facilitate the transfer of assets between group companies.<\/p>\n<p>A very obvious form of tax avoidance would be to transfer an asset to a new dummy company within the group and then sell the company out of the group.\u00a0 For this reason, anti-avoidance deems there to be a capital gain when the company ceases to be a member of the group.\u00a0 Other more complex, anti avoidance Legislation also exists.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reorganistions\"><\/span>Reorganistions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Capital gains tax issues are of prime importance in the context of reorganisation of companies. \u00a0Stamp duty issues also arise.\u00a0 A reorganisation may involve an amalgamation of companies or partition.<\/p>\n<p>Tax legislation does not have a readymade relief for partition of businesses between shareholders. Tax legislation allows relief for reorganisations which do not involve a change in the overall shareholders.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"CGT_Groups\"><\/span>CGT Groups<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The definition of a group for capital gains tax purposes is narrower than that for company law purposes. \u00a0For company law purposes a group can be constituted with a 50 percent plus one shareholding or indeed alternatively by the issue of certain shares by which another company may control the composition of the board of directors.<\/p>\n<p>For capital gains tax purposes, a group must comprise of a holding company and companies which are 75 percent subsidiaries.\u00a0 This means that the holding company must own 75 percent of the share capital.\u00a0 This 75 percent may be owned directly or indirectly. \u00a0Where it is held indirectly it is held via another subsidiary.<\/p>\n<p>The required shareholding refers to beneficial shareholding.\u00a0 It is not enough that the shares are nominally held.\u00a0 The company must be beneficial owner of the shares and must be entitled to 75 percent of the divideinds \/ distributions and 75 percent of the assets on a winding up.\u00a0 This is to prevent the creation of artificial groups by creating different classes of shares with less than the standard rights normally attaching to shares.<\/p>\n<p>The principal company and the 75% subsidiaries must be resident in an EEA state or the United Kingdom. The 75% holding may be direct or indirect.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Transfer_of_Assets\"><\/span>Transfer of Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where there is a group for capital gains tax purposes, an asset may be transferred free of capital gains tax. \u00a0It is \u00a0deemed to pass at the price that yields no loss or no gain.\u00a0 This determines that there is no capital gain by the disposing company. The requirement for the withholding tax clearance certificate will still generally apply.<\/p>\n<p>The acquiring company is deemed to acquire the asset at the same time and at the same cost as the disposing company.\u00a0 Therefore from a s CGT perspective the holding by group is treated in effect, \u00a0as a whole. \u00a0When the asset is ultimately disposed of by the acquiring company for capital gain during the requisite time is charged.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Leaving_the_group\"><\/span>Leaving the group<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where a company receives assets from another company within its group and then leaves the company, a capital gains tax charge arises.\u00a0 This is deemed to arise at the date the asset was originally acquired.\u00a0 The provision\u00a0 applies where the company leaves the group within 10 years.<\/p>\n<p>In both of the above cases the gain is calculated \u00a0retrospectively as at \u00a0the date of the transfer of the asset not the date on which the company leaves the group.<\/p>\n<p>The gain is assessed on the company leaving the group. However the parent or other group companies may also be assessed for the tax.<\/p>\n<p>There are exemptions where the company leaves by reason of liquidation or bona fide a commercial reason or where both the transferee and transferor group leaves the group together and both remain associated.<\/p>\n<p>There is another exception where the company technically leaves the group as a result of a merger with another company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Artificial_Use_of_Losses\"><\/span>Artificial Use of Losses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is anti-avoidance legislation designed to prevent the use of the relief to create artificial loss.\u00a0 Where assets are transferred between group members in a so-called depreciatory transaction, the loss arising from subsequent sale of shares in that company (which has been denuded of value by the transfer) is not allowed.<\/p>\n<p>There is an anti-avoidance provision when a company is denuded of value prior to a sale by a substantial dividend.\u00a0 Generally dividends within a group are free of tax. \u00a0Like the depreciatory transaction provision its effect is to deny the loss\u00a0 that would\u00a0 otherwise arise.<\/p>\n<p>There are rules restricting the purchase of companies which hold capital losses on their assets.\u00a0 This is to prevent companies purchasing other companies as members of their group and utilising the losses, triggering the losses on both assets for offsetting against profits\u00a0 in the group.<\/p>\n<p>Losses which exist at the time the company is purchased may only be used against gains in respect of assets held at the time it entered the group and assets which are later acquired and used exclusively for the purpose of a trade conducted by it.<\/p>\n<p>Unlike the position with \u00a0corporation profits tax loss, it is not possible to pass capital gains tax losses around a group.\u00a0 It is necessary to transfer the assets to the company with the off-setting gain and realise the loss in that latter company.<\/p>\n<p>The capital gains tax relief does not apply to transfer certain transfers of share and loan capital which are effectively comprise repayment or redemption of the capital.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Transfers_to_and_from_Stock\"><\/span>Transfers to and from Stock<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where assets are held as trading stock (as opposed to capital assets) where there is a \u00a0transfer to another group company to be held as an investment, (i.e., a capital asset) the transferring company is deemed to have appropriated the \u00a0asset from stock before the transfer at its acquisiton value.The transferee is therefore deemed to have acquired has its value when it first was acquired. \u00a0There is deemed to be disposal as a no profit and no loss.\u00a0 The acquiring company has been deemed to acquire at the original acquisition cost.<\/p>\n<p>In the reverse situation where a capital asset is transferred to be held as stock in another company, it is deemed to be transferred by the transferor company at cost and the transferor company is deemed to acquire it cost and resell and reacquire it at market value.\u00a0 The \u00a0acquiring company is deemed to realise a profit on the deemed sale which is subject to corporation profits tax.<\/p>\n<p>The relief in in respect of transfer of assets other than trading stock between members of groups of companies applies to companies which are resident in countries with which the state has a double taxation treaty\u00a0 pursuant to Finance Act 2017.<\/p>\n<p><strong>Brexit UK and reliefs<\/strong><\/p>\n<p>Finance Act 2019\u00a0 ensures that the status quo is maintained in relation to certain corporation tax measures or reliefs in the event of a disorderly exit of the UK from the EU. Any reference to a company in the relevant legislation, which relate to groups of companies and chargeable gains, is a reference to a company which is resident in an EU Member State or an EEA state with which there is a double taxation treaty with Ireland.<\/p>\n<p>Companies which are resident in the UK\u00a0 continue to be regarded as being in a group of companies in the event of a disorderly Brexit, so that the reliefs\u00a0 fpr<\/p>\n<ul>\n<li>company amalgamations by exchange of shares,<\/li>\n<li>company reconstructions and amalgamations<\/li>\n<li>transfers of trading stock within a group and<\/li>\n<li>replacement of business assets by members of a group<\/li>\n<\/ul>\n<p>continue to apply in the case of such companies. In addition, it will ensure that an immediate tax charge will not arise solely as a result of the UK ceasing to be an EU Member State.<\/p>\n<h2><\/h2>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>&nbsp;<\/p>\n<h2><\/h2>\n<p>&nbsp;<\/p>\n<p>Chapter 4<\/p>\n<h4>Shares and securities (ss. 580-592)<\/h4>\n<p>580.<\/p>\n<h4>Shares, securities, etc: identification.<\/h4>\n<p>(1)For the purposes of identifying shares acquired with shares subsequently disposed of, in so far as the shares are of the same class, shares acquired at an earlier time shall for the purposes of the Capital Gains Tax Acts be deemed to have been disposed of before shares acquired at a later time.<\/p>\n<p>(2)Shares shall not be treated for the purposes of this section as being of the same class unless, if dealt with on a stock exchange, they would be so treated, but shall be treated in accordance with this section notwithstanding that they are identified in a different way by a disposal or by the transfer or delivery giving effect to the disposal.<\/p>\n<p>(3)This section shall apply to securities as it applies to shares.<\/p>\n<p>(4)This section apart from subsection (2) shall apply in relation to any assets as it applies in relation to shares where the assets are of a nature to be dealt in without identifying the particular assets disposed of or acquired.<\/p>\n<p>(5)<\/p>\n<p>(a)This subsection shall apply in relation to the disposal of any assets to which paragraph 13 of Schedule 1 to the Capital Gains Tax Act, 1975, applied, where &#8211;<\/p>\n<p>(i)any such assets were on the 6th day of April, 1978, comprised in a holding of the kind referred to in that paragraph,<\/p>\n<p>(ii)the holding consisted of assets acquired on different dates, and<\/p>\n<p>(iii)before the 6th day of April, 1978, there had been a disposal of assets which if that disposal had not taken place would have been comprised in the holding on that date.<\/p>\n<p>(b)For the purposes of applying subsection (1) in relation to each disposal to which this subsection applies &#8211;<\/p>\n<p>(i)shares acquired on different dates shall be treated as if they were distinguishable parts of a single asset (in this subsection referred to as &#8220;the holding&#8221;) acquired respectively on the separate dates on which they were acquired and for the consideration for which they were acquired, and<\/p>\n<p>(ii)it shall be assumed that, on each occasion before the 6th day of April, 1978, on which a disposal was made of shares in the holding, each of the distinguishable parts of the holding as it existed immediately before the disposal was reduced, both as regards the number of shares comprised in that part and the expenditure attributable to that part under paragraphs (a) and (b) of section 552(1), in the same proportion as the number of shares so disposed of bears to the number of shares comprised in the holding immediately before that disposal, and<\/p>\n<p>(iii)the number of shares comprised in each such part on the 6th day of April, 1978, and the expenditure attributable (apart from section 556) to that part under paragraphs (a) and (b) of section 552(1) shall, in relation to a disposal made on or after that date, be the number and expenditure respectively determined in accordance with this subsection.<\/p>\n<p>(c)Nothing in this subsection shall affect the computation of any chargeable gain or allowable loss in relation to any disposal of assets made before the 6th day of April, 1978.<\/p>\n<p>(6)This section shall apply subject to section 581.<\/p>\n<p>581.<\/p>\n<h4>Disposals of shares or securities within 4 weeks of acquisition.<\/h4>\n<p>(1)For the purposes of the Capital Gains Tax Acts, where the same person in the same capacity disposes of shares of the same class as shares which such person acquired within 4 weeks preceding the disposal, the shares disposed of shall be identified with the shares so acquired within those 4 weeks.<\/p>\n<p>(2)For the purposes of the Capital Gains Tax Acts, where the quantity of shares of the same class disposed of exceeds the quantity of shares of the same class acquired within the period of 4 weeks preceding the disposal, the excess shall be identified with shares of the same class acquired otherwise than within the period of 4 weeks.<\/p>\n<p>(3)Where a loss accrues to a person on the disposal of shares and such person reacquires shares of the same class within 4 weeks after the disposal, that loss shall not be allowable under section 538 or 546 otherwise than by deduction from a chargeable gain accruing to such person on the disposal of the shares reacquired; but, if the quantity of shares so reacquired is less than the quantity so disposed of, such proportion of the loss shall be allowable under section 538 or 546 as bears the same proportion to the loss on the disposal as the quantity not reacquired bears to the quantity disposed of.<\/p>\n<p>(4)In the case of a man and his wife living with him, or civil partners living together &#8211;<\/p>\n<p>(a)subsections (1) and (2) shall, with the necessary modifications, apply where shares are acquired by one of them and shares of the same class are disposed of within 4 weeks by the other, and<\/p>\n<p>(b)subsection (3) shall, with the necessary modifications, apply also where a loss on the disposal accrues to one of them and the acquisition after the disposal is made by the other.<\/p>\n<p>(5)This section shall apply to securities as it applies to shares.<\/p>\n<p>582.<\/p>\n<h4>Calls on shares.<\/h4>\n<p>Where, as respects an issue of shares in or debentures of a company, a person gives any consideration on a date which is more than 12 months after the date on which the shares or debentures were allotted, the consideration shall, in the computation of a gain accruing to such person on a disposal of the shares or debentures, be deemed for the purposes of section 556 to be expenditure incurred on the date on which the consideration was given.<\/p>\n<p>583.<\/p>\n<h4>Capital distributions by companies.<\/h4>\n<p>(1)In this section, &#8220;capital distribution&#8221; means any distribution from a company (including a distribution in the course of dissolving or winding up the company) in money or money&#8217;s worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax.<\/p>\n<p>(2)Where a person receives or becomes entitled to receive in respect of shares in a company any capital distribution from the company (other than a new holding within the meaning of section 584), such person shall be treated for the purposes of the Capital Gains Tax Acts as if such person had in consideration of that capital distribution disposed of an interest in the shares.<\/p>\n<p>584.<\/p>\n<h4>Reorganisation or reduction of share capital.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;new holding&#8221;, in relation to any original shares, means the shares in and debentures of the company which as a result of the reorganisation or reduction of capital represent the original shares (including such, if any, of the original shares as remain);<\/p>\n<p>&#8220;original shares&#8221; means shares held before and concerned in the reorganisation or reduction of capital;<\/p>\n<p>references to a reorganisation of a company&#8217;s share capital include &#8211;<\/p>\n<p>(a)any case where persons are, whether for payment or not, allotted shares in or debentures of the company in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of shares in the company or of any class of shares in the company, and<\/p>\n<p>(b)any case where there is more than one class of shares and the rights attached to shares of any class are altered;<\/p>\n<p>references to a reduction of share capital do not include the paying off of redeemable share capital and, where shares in a company are redeemable by the company otherwise than by the issue of shares or debentures (with or without other consideration) and otherwise than in a liquidation, the shareholder shall be treated as disposing of the shares at the time of the redemption.<\/p>\n<p>(2)This section shall apply for the purposes of the Capital Gains Tax Acts in relation to any reorganisation or reduction of a company&#8217;s share capital.<\/p>\n<p>(3)Subject to subsections (4) to (10), a reorganisation or reduction of a company&#8217;s share capital shall not be treated as involving any disposal of the original shares or any acquisition of the new holding or any part of it; but the original shares (taken as a single asset) and the new holding (taken as a single asset) shall be treated as the same asset acquired as the original shares were acquired.<\/p>\n<p>(4)<\/p>\n<p>(a)Where on a reorganisation or reduction of a company&#8217;s share capital a person gives or becomes liable to give any consideration for such person&#8217;s new holding or any part of it, that consideration shall, in the computation of a gain accruing to such person on a disposal of the new holding or any part of it, be deemed for the purposes of section 556 to be expenditure incurred on the date the consideration was given and, if the new holding or part of it is disposed of with a liability attaching to it in respect of that consideration, the consideration given for the disposal shall be adjusted accordingly.<\/p>\n<p>(b)Notwithstanding paragraph (a), there shall not be treated as consideration given for the acquisition of the new holding &#8211;<\/p>\n<p>(i)any surrender, cancellation or other alteration of the original shares or of the rights attached to the original shares, or<\/p>\n<p>(ii)any consideration consisting of any application, in paying up the shares or debentures or any part of them, of any assets of the company, or of any dividend or other distribution declared out of those assets but not made;<\/p>\n<p>but, if section 816 applies in relation to the issue of any of the shares, the sum in cash which the person would have received if the person had not exercised the option to receive additional share capital instead of a sum in cash shall be treated for the purposes of this subsection as consideration given for those shares.<\/p>\n<p>(5)Where on a reorganisation or reduction of a company&#8217;s share capital a person receives (or is deemed to receive), or becomes entitled to receive, any consideration other than the new holding for the disposal of an interest in the original shares, and in particular &#8211;<\/p>\n<p>(a)where under section 583 such person is to be treated as if such person had in consideration of a capital distribution disposed of an interest in the original shares, or<\/p>\n<p>(b)where such person receives (or is deemed to receive) a consideration from other shareholders in respect of a surrender of rights derived from the original shares,<\/p>\n<p>such person shall be treated as if the new holding resulted from such person having for that consideration disposed of an interest in the original shares (but without prejudice to the original shares and the new holding being treated in accordance with subsection (3) as the same asset).<\/p>\n<p>(6)Where, for the purpose of computing the gain or loss accruing to a person from the acquisition and disposal of any part of the new holding, it is necessary to apportion the cost of acquisition of any of the original shares between the part which is disposed of and the part which is retained, the apportionment shall be made by reference to market value at the date of the disposal (with such adjustment of the market value of any part of the new holding as may be required to offset any liability attaching to the new holding but forming part of the cost to be apportioned), and any corresponding apportionment for the purposes of subsection (5) shall be made in the like manner.<\/p>\n<p>(7)Notwithstanding subsection (6) &#8211;<\/p>\n<p>(a)where a new holding &#8211;<\/p>\n<p>(i)consists of more than one class of shares in or debentures of the company and one or more of those classes is of shares or debentures which, at any time not later than the end of the period of 3 months beginning on the date on which the reorganisation or reduction of capital took effect, or of such longer period as the Revenue Commissioners may by notice in writing allow, had quoted market values on a recognised stock exchange in the State or elsewhere, or<\/p>\n<p>(ii)consists of more than one class of rights of unit holders and one or more of those classes is of rights the prices of which were published regularly by the managers of the scheme at any time not later than the end of that period of 3 months (or longer if so allowed), and<\/p>\n<p>(b)where, for the purpose of computing the gain or loss accruing to a person from the acquisition and disposal of the whole or any part of any class of shares or securities or rights of unit holders forming part of a new holding of the kind referred to in paragraph (a), it is necessary to apportion costs of acquisition between the part that is disposed of and the part that is retained,<\/p>\n<p>then, the cost of acquisition of the new holding shall first be apportioned between the entire classes of shares or debentures or rights of which it consists by reference to market value on the first day (whether that day fell before the reorganisation or reduction of capital took effect or later) on which market values or prices were quoted or published for the shares, debentures or rights mentioned in paragraph (a) or (b) (with such adjustment of the market value of any class as may be required to offset any liability attaching thereto but forming part of the cost to be apportioned) and, for the purposes of this subsection, the day on which a reorganisation of share capital involving the allotment of shares or debentures or unit holders&#8217; rights takes effect shall be the day following the day on which the right to renounce any allotment expires.<\/p>\n<p>(8)Where a person receives or becomes entitled to receive in respect of any shares in or debentures of a company a provisional allotment of shares in or debentures of the company and such person disposes of such person&#8217;s rights, section 583 shall apply as if the amount of the consideration for the disposal were a capital distribution received by such person from the company in respect of the first-mentioned shares, and as if such person had, instead of disposing of the rights, disposed of an interest in those shares.<\/p>\n<p>(9)Subsection (3) shall not apply to the extent that the new holding comprises debentures, loan stock or other similar securities issued or allotted on or after 4 December 2002, unless<\/p>\n<p>(a)they were so issued or allotted pursuant to a binding written agreement made before that date, or<\/p>\n<p>(b)this section has application by virtue of section 586.<\/p>\n<p>(10)<\/p>\n<p>(a)In this subsection, &#8216;investment undertaking&#8217; and &#8216;unit&#8217; have the same meanings respectively as in section 739B.<\/p>\n<p>(b)Subsection (3) shall not apply where the new holding comprises units in an investment undertaking, being a company.<\/p>\n<p>585.<\/p>\n<h4>Conversion of securities.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;conversion of securities&#8221; includes &#8211;<\/p>\n<p>(a)a conversion of securities of a company into shares in the company,<\/p>\n<p>(b)a conversion at the option of the holder of the securities converted as an alternative to the redemption of those securities for cash where the conversion takes place before 4 December 2002, or where the conversion takes place after that date pursuant to a binding written agreement made before that date, and<\/p>\n<p>(c)any exchange of securities effected in pursuance of any enactment which provides for the compulsory acquisition of any shares or securities and the issue of securities or other securities instead;<\/p>\n<p>&#8220;security&#8221; includes any loan stock or similar security, whether of any government or of any public or local authority or of any company and whether secured or unsecured but excluding securities within section 607.<\/p>\n<p>&#8220;investment undertaking&#8221; and &#8221;unit&#8221; have the same meanings respectively as in section 739B;<\/p>\n<p>(1A)For the purposes of this section, a conversion of securities shall not include a conversion of securities into units in an investment undertaking, being a company.<\/p>\n<p>(2)Section 584 shall apply with any necessary modifications in relation to the conversion of securities as it applies in relation to the reorganisation or reduction of a company&#8217;s share capital.<\/p>\n<p>586.<\/p>\n<h4>Company amalgamations by exchange of shares.<\/h4>\n<p>(1)Subject to section 587, where a company issues shares or debentures to a person in exchange for shares in or debentures of another company, section 584 shall apply with any necessary modifications as if the 2 companies were the same company and the exchange were a reorganisation of its share capital.<\/p>\n<p>(2)This section shall apply only where &#8211;<\/p>\n<p>(a)the company issuing the shares or debentures has, or in consequence of the exchange will have, control of the other company, or<\/p>\n<p>(b)the first-mentioned company issues the shares or debentures in exchange for shares as the result of a general offer made to members of the other company or any class of them (with or without exceptions for persons connected with the first-mentioned company), the offer being made in the first instance on a condition such that if it were satisfied the first-mentioned company would have control of the other company.<\/p>\n<p>(3)<\/p>\n<p>(a)In this subsection, &#8220;shares&#8221; includes stock, debentures and any interests to which section 587(3) applies and also includes any option in relation to such shares.<\/p>\n<p>(b)This section shall not apply to the issue by a company of shares in the company by means of an exchange referred to in subsection (1) unless it is shown that the exchange is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is avoidance of liability to tax.<\/p>\n<p>(c)This section shall not apply where, on or after 4 December 2002, a company issues debentures, loan stock or other similar securities to a person in exchange for shares of another company unless &#8211;<\/p>\n<p>(i)such issue is pursuant to a binding written agreement made before that date, or<\/p>\n<p>(ii)the company issuing the debentures, loan stock or other similar securities and the person to whom they are issued are members of the same group (within the meaning of section 616) throughout the period commencing one year before and ending one year after the day the debentures, loan stock or other similar securities are issued, or<\/p>\n<p>(iii)the other company is a company quoted on a recognised stock exchange and its board of directors had, before 4 December 2002, made a public announcement that they had agreed the terms of a recommended offer to be made for the company&#8217;s entire issued, and to be issued, ordinary share capital.<\/p>\n<p>(d)This section shall not apply where the company issuing the shares or debentures is an investment undertaking within the meaning of section 739B.<\/p>\n<p>587.<\/p>\n<h4>Company reconstructions and amalgamations.<\/h4>\n<p>(1)In this section, &#8220;scheme of reconstruction or amalgamation&#8221; means a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies, and references to shares or debentures being retained include their being retained with altered rights or in an altered form, whether as the result of reduction, consolidation, division or otherwise.<\/p>\n<p>(2)Where under any arrangement between a company and the persons holding shares in or debentures of the company or any class of such shares or debentures, being an arrangement entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation, another company issues shares or debentures to those persons in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of the first-mentioned shares or debentures, but the first-mentioned shares or debentures are either retained by those persons or cancelled, then, those persons shall be treated as exchanging the first-mentioned shares or debentures for those held by them in consequence of the arrangement (any shares or debentures retained being for this purpose regarded as if they had been cancelled and replaced by a new issue), and accordingly section 586(1) shall apply to such exchange of shares or debentures.<\/p>\n<p>(2A)<\/p>\n<p>(a)In this subsection, \u2018merger\u2019 and \u2018division\u2019 have the same meaning as in section 638A (inserted by the Finance Act 2017).<\/p>\n<p>(b)References in subsection (2) to shares being cancelled shall be deemed to include references to shares which are extinguished as a result of a merger or division.<\/p>\n<p>(3)Subsection (2) shall apply in relation to a company which has no share capital as if references to shares in or debentures of a company included references to any interests in the company possessed by members of the company, and sections 584 and 586 shall apply accordingly.<\/p>\n<p>(4)<\/p>\n<p>(a)In this subsection, &#8220;shares&#8221; has the same meaning as in section 586(3).<\/p>\n<p>(b)This section shall not apply to the issue by a company of shares in the company under a scheme of reconstruction or amalgamation referred to in subsection (2) unless it is shown that the reconstruction or amalgamation is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is avoidance of liability to tax.<\/p>\n<p>(c)This section shall not apply to any person to whom, under a scheme of reconstruction or amalgamation, a company issues debentures, loan stock or other similar securities on or after 4 December 2002, unless &#8211;<\/p>\n<p>(i)they were issued pursuant to a binding written agreement made before that date, or<\/p>\n<p>(ii)that person and the company are members of the same group (within the meaning of section 616) throughout the period commencing one year before and ending one year after the day the debentures, loan stock or other similar securities were issued, or<\/p>\n<p>(iii)they were issued pursuant to a scheme or arrangement, the principal terms of which had been brought to the attention of the Revenue Commissioners and the Revenue Commissioners had acknowledged in writing before 4 December 2002, to the effect that the scheme or arrangement was a scheme of reconstruction and amalgamation.<\/p>\n<p>(d)This section shall not apply where the company issuing the shares or debentures is an investment undertaking within the meaning of section 739B.<\/p>\n<p>588.<\/p>\n<h4>Demutualisation of assurance companies.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;assurance company&#8221; means-<\/p>\n<p>(a)an assurance company within the meaning of section 3 of the Insurance Act 1936, or<\/p>\n<p>(b)a person that holds an authorisation &#8211;<\/p>\n<p>(i)within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994), or<\/p>\n<p>(ii)under the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015), in respect of insurance of a class listed in Schedule 2 to those Regulations;<\/p>\n<p>&#8220;free shares&#8221;, in relation to a member of the assurance company, means any shares issued by the successor company to that member in connection with the arrangement but for no new consideration;<\/p>\n<p>&#8220;member&#8221;, in relation to the assurance company, means a person who is or has been a member of it, in that capacity, and any reference to a member includes a reference to a member of any particular class or description;<\/p>\n<p>&#8220;new consideration&#8221; means consideration other than &#8211;<\/p>\n<p>(a)consideration provided directly or indirectly out of the assets of the assurance company or the successor company, or<\/p>\n<p>(b)consideration derived from a member&#8217;s shares or other rights in the assurance company or the successor company.<\/p>\n<p>(2)This section shall apply as on and from the 21st day of April, 1997, in respect of an arrangement between a company and its members, being an arrangement to which subsection (2) of section 587 applies by virtue of subsection (3) of that section, and where the company is an assurance company which carries on a mutual life business.<\/p>\n<p>(3)Where in connection with the arrangement there is conferred on a member of the assurance company concerned any rights &#8211;<\/p>\n<p>(a)to acquire shares in another company (in this section referred to as the &#8220;successor company&#8221;) in priority to other persons,<\/p>\n<p>(b)to acquire shares in the successor company for consideration of an amount or value lower than the market value of the shares, or<\/p>\n<p>(c)to free shares in the successor company,<\/p>\n<p>then, any such rights so conferred on a member shall be regarded for the purposes of capital gains tax as an option (within the meaning of section 540) granted to and acquired by such member for no consideration and having no value at the time of that grant and acquisition.<\/p>\n<p>(4)Where in connection with the arrangement shares in the successor company are issued to a member of the assurance company concerned, and such shares are treated under section 587 as having been exchanged by the member for the interest in the company possessed by the member, those shares shall, notwithstanding section 584, be regarded for the purposes of section 552(1) &#8211;<\/p>\n<p>(a)as having been issued to the member for a consideration given by the member of an amount or value equal to the amount or value of any new consideration given by the member for the shares or, if no new consideration is given, as having been issued for no consideration, and<\/p>\n<p>(b)as having, at the time of their issue to the member, a value equal to the amount or value of the new consideration so given or, if no new consideration is given, as having no value;<\/p>\n<p>but this subsection is without prejudice to the operation where applicable of subsection (3).<\/p>\n<p>(5)Subsection (6) shall apply in any case where &#8211;<\/p>\n<p>(a)in connection with the arrangement, shares in the successor company are issued by that company to trustees on terms which provide for the transfer of those shares to members of the assurance company concerned for no new consideration, and<\/p>\n<p>(b)the circumstances are such that in the hands of the trustees the shares constitute settled property.<\/p>\n<p>(6)<\/p>\n<p>(a)Where this subsection applies, then, for the purposes of capital gains tax &#8211;<\/p>\n<p>(i)the shares shall be regarded as acquired by the trustees for no consideration,<\/p>\n<p>(ii)the interest of any member in the settled property constituted by the shares shall be regarded as acquired by the member for no consideration and as having no value at the time of its acquisition, and<\/p>\n<p>(iii)where on the occasion of a member becoming absolutely entitled as against the trustees to any of the settled property, both the trustees and the member shall be treated as if, on the member becoming so entitled, the shares in question had been disposed of and immediately reacquired by the trustees, in their capacity as trustees within section 567(2), for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss would accrue to the trustees, and accordingly section 576(1) shall not apply in relation to that occasion.<\/p>\n<p>(b)Reference in paragraph (a) to the case where a member becomes absolutely entitled to settled property as against the trustees shall be taken to include reference to the case where the member would become so entitled but for being a minor or otherwise under a legal disability.<\/p>\n<p>(7)Where in connection with the arrangements there is conferred on a member of an assurance company a right to acquire shares in a successor company, or a right to a distribution of assets (including cash) of the assurance company, the assurance company shall, within 30 days of the arrangements being effected or within such longer period as the Revenue Commissioners may on request allow, make a return to the Revenue Commissioners in such electronic format as they require, which, in respect of each such member, specifies &#8211;<\/p>\n<p>(a)the name of the member,<\/p>\n<p>(b)the address of the member,<\/p>\n<p>(c)the number of shares in the successor company which the member has a right to acquire,<\/p>\n<p>(d)the amount of new consideration which the member is required to give to acquire those shares,<\/p>\n<p>(e)the value of any assets of the assurance company to which the member has a right, and<\/p>\n<p>(f)such other information that the Revenue Commissioners advise the assurance company that they require.<\/p>\n<p>589.<\/p>\n<h4>Shares in close company transferring assets at undervalue.<\/h4>\n<p>(1)Where a close company transfers an asset to any person otherwise than by means of a bargain made at arm&#8217;s length and for a consideration of an amount or value less than the market value of the asset, an amount equal to the difference shall be apportioned among the issued shares of the company, and the holders of those shares shall be treated in accordance with subsections (2) and (3).<\/p>\n<p>(2)For the purposes of the computation of a chargeable gain accruing on the disposal of any of those shares by the person owning them on the date of transfer, an amount equal to the amount so apportioned to that share shall be excluded from the expenditure allowable as a deduction under section 552(1)(a) from the consideration for the disposal.<\/p>\n<p>(3)Where the person owning any of those shares at the date of transfer is itself a close company, an amount equal to the amount apportioned to the shares so owned under subsection (1) to that close company shall be apportioned among the issued shares of that close company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of close companies.<\/p>\n<p>(4)This section shall apply to a company within section 590 as it applies to a close company.<\/p>\n<p>590. Attribution to participators of chargeable gains accruing to non-resident company.<br \/>\n(1)In this section &#8211;<\/p>\n<p>(a)&#8217;participator&#8217;, in relation to a company, has the meaning assigned to it by section 433(1);<\/p>\n<p>(b)references to a person&#8217;s interest as a participator in a company are references to the interest in the company which is represented by all the factors by reference to which the person falls to be treated as such a participator; and<\/p>\n<p>(c)references to the extent of such an interest are references to the proportion of the interests as participators of all the participators in the company (including any who are not resident or ordinarily resident in the State) which on a just and reasonable apportionment is represented by that interest.<\/p>\n<p>(2)For the purposes of this section, where &#8211;<\/p>\n<p>(a)the interest of any person in a company is wholly or partly represented by an interest (in this subsection referred to as the &#8216;person&#8217;s beneficial interest\u2019) which the person has under any settlement, and<\/p>\n<p>(b)the person&#8217;s beneficial interest is the factor, or one of the factors, by reference to which the person would be treated, apart from this subsection, as having an interest as a participator in the company,<\/p>\n<p>the interest as a participator in the company which would be that person&#8217;s shall be deemed, to the extent that it is represented by the person&#8217;s beneficial interest, to be an interest of the trustees of the settlement, and not an interest of the person&#8217;s, and references in this section, in relation to a company, to a participator shall be construed accordingly.<\/p>\n<p>(3)This section shall apply as respects chargeable gains accruing to a company &#8211;<\/p>\n<p>(a)which is not resident in the State, and<\/p>\n<p>(b)which would be a close company if it were resident in the State.<\/p>\n<p>(4)Subject to this section, every person who at the time when the chargeable gain accrues to the company is resident or ordinarily resident in the State, who, if an individual, is domiciled in the State, and who is a participator in the company, shall be treated for the purposes of the Capital Gains Tax Acts as if a part of the chargeable gain had accrued to that person.<\/p>\n<p>(5)The part of the chargeable gain referred to in subsection (4) shall be equal to the proportion of that gain that corresponds to the extent of the participator&#8217;s interest as a participator in the company.<\/p>\n<p>(6)Subsection (4) shall not apply in the case of any participator in the company to which the gain accrues where the aggregate amount falling under that subsection to be apportioned to the participator and to persons connected with the participator does not exceed one-twentieth of the gain.<\/p>\n<p>(7)This section shall not apply in relation to &#8211;<\/p>\n<p>(a)a chargeable gain accruing on the disposal of assets, being &#8211;<\/p>\n<p>(i)tangible property, whether movable or immovable, or a lease of such property, or<\/p>\n<p>(ii)specified intangible assets within the meaning of section 291A(1),<\/p>\n<p>where the assets were used, and used only, for the purposes of a trade carried on by a company, or by another company which is a member of the same group (within the meaning of subsection (16)) as the first-mentioned company, wholly outside the State,<\/p>\n<p>(aa)a chargeable gain accruing on the disposal of an asset where it is shown in writing or otherwise to the satisfaction of the Revenue Commissioners that, at the time of the disposal, genuine economic activities are carried on by the company in a relevant Member State (within the meaning of section 806(11)(a)),<\/p>\n<p>(b)a chargeable gain accruing on the disposal of currency or of a debt within section 541(6), where the currency or debt is or represents money in use for the purposes of a trade carried on by the company wholly outside the State, or<\/p>\n<p>(c)a chargeable gain in respect of which the company is chargeable to capital gains tax by virtue of section 29 or to corporation tax by virtue of section 25(2)(b).<\/p>\n<p>(8)Where &#8211;<\/p>\n<p>(a)any amount of capital gains tax is paid by a person in pursuance of subsection (4), and<\/p>\n<p>(b)an amount in respect of the chargeable gain is distributed, whether by way of dividend or distribution of capital or on the dissolution of the company, within 2 years from the time when the chargeable gain accrued to the company,<\/p>\n<p>that amount of tax, so far as neither reimbursed by the company nor applied as a deduction under subsection (9), shall be applied for reducing or extinguishing any liability of the person to income tax in respect of the distribution or (in the case of a distribution falling to be treated as a disposal on which a chargeable gain accrues to the person) to any capital gains tax in respect of the distribution.<\/p>\n<p>(9)The amount of capital gains tax paid by a person in pursuance of subsection (4), so far as neither reimbursed by the company nor applied under subsection (8) for reducing any liability to tax, shall be allowable as a deduction in the computation under the Capital Gains Tax Acts of a gain accruing on the disposal by the person of any asset representing the person&#8217;s interest as a participator in the company.<\/p>\n<p>(10)In ascertaining for the purposes of subsection (8) the amount of income tax chargeable on any person for any year of assessment on or in respect of a distribution, any such distribution mentioned in that subsection which falls to be treated as income of that person for that year of assessment shall be regarded as forming the highest part of the income on which the person is charged to tax for the year of assessment.<\/p>\n<p>(11)To the extent that it would reduce or extinguish chargeable gains accruing by virtue of this section to a person in a year of assessment, this section shall apply in relation to a loss accruing to the company on the disposal of an asset in that year of assessment as it would apply if a gain instead of a loss had accrued to the company on the disposal, but shall only apply in relation to that person; and, subject to the preceding provisions of this subsection, this section shall not apply in relation to a loss accruing to the company.<\/p>\n<p>(12)Where the person who is a participator in the company at the time when the chargeable gain accrued to the company is itself a company which is not resident in the State but which would be a close company if it were resident in the State, an amount equal to the amount apportioned under subsection (5) out of the chargeable gain to the participating company&#8217;s interest as a participator in the company to which the gain accrues shall be further apportioned among the participators in the participating company according to the extent of their respective interests as participators, and subsection (4) shall apply to them accordingly in relation to the amounts further apportioned, and so on through any number of companies.<\/p>\n<p>(13)The persons treated by this section as if a part of a chargeable gain accruing to a company had accrued to them shall include trustees who are participators in the company, or in any company amongst the participators in which the gain is apportioned under subsection (12), if when the gain accrued to the company the trustees are neither resident nor ordinarily resident in the State.<\/p>\n<p>(14)Where any tax payable by any person by virtue of subsection (4) is paid by the company to which the chargeable gain accrues, or in a case under subsection (12) is paid by any such other company, the amount so paid shall not, for the purposes of income tax, capital gains tax or corporation tax, be regarded as a payment to the person by whom the tax was originally payable.<\/p>\n<p>(15)For the purposes of this section, the amount of the gain or loss accruing at any time to a company which is not resident in the State shall be computed (where it is not the case) as if the company were within the charge to corporation tax on capital gains.<\/p>\n<p>(16)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8216;group&#8217; shall be construed in accordance with subsections (1) (excluding paragraph (a)), (3) and (4) of section 616;<\/p>\n<p>&#8216;non-resident group&#8217; of companies &#8211;<\/p>\n<p>(i)in the case of a group none of the members of which is resident in the State, means that group, and<\/p>\n<p>(ii)in the case of a group 2 or more members of which are not resident in the State, means the members not resident in the State.<\/p>\n<p>(b)For the purposes of this section &#8211;<\/p>\n<p>(i)section 617 (other than paragraphs (b) and (c) of subsection (1)), section 618 (with the omission of the words &#8216;to which this section applies&#8217; in subsections (1) (a) and (2), of &#8216;such&#8217; in subsection (1)(c) and of subsection (3)), section 619(2) (with the substitution for &#8216;in the course of a disposal to which section 617 applies&#8217; of &#8216;at a time when both were members of the group&#8217;) and section 620(2) (with the omission of the words &#8216;to which this section applies&#8217;) shall apply in relation to non-resident companies which are members of a non-resident group of companies as they apply in relation to companies resident in the State which are members of a group of companies, and<\/p>\n<p>(ii)sections 623 (apart from paragraphs (c) and (d) of subsection (2) and 625 shall apply as if for any reference in those sections to a group of companies there were substituted a reference to a non-resident group of companies, and as if references to companies were references to companies not resident in the State.<\/p>\n<p>591.<\/p>\n<h4>Relief for individuals on certain reinvestment.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;director&#8221; has the same meaning as in section 116;<\/p>\n<p>&#8220;eligible shares&#8221; means new ordinary shares which carry no present or future preferential right to dividends or to a company&#8217;s assets on its winding up and no present or future preferential right to be redeemed;<\/p>\n<p>&#8220;full-time director&#8221;, &#8220;full-time employee&#8221;, &#8220;part-time director&#8221; and &#8220;part-time employee&#8221; have the same meanings respectively as in section 250;<\/p>\n<p>&#8220;holding company&#8221; means a company whose business consists wholly or mainly in the holding of shares in, or securities of, one or more companies which are trading companies and which are its 51 per cent subsidiaries;<\/p>\n<p>&#8220;material disposal&#8221; has the meaning assigned to it by subsection (5);<\/p>\n<p>&#8220;ordinary shares&#8221; means shares forming part of a company&#8217;s ordinary share capital;<\/p>\n<p>&#8220;ordinary share capital&#8221; has the same meaning as in section 2;<\/p>\n<p>&#8220;the original holding&#8221; has the meaning assigned to it by subsection (2);<\/p>\n<p>&#8220;qualifying company&#8221; has the meaning assigned to it by subsection (7);<\/p>\n<p>&#8220;qualifying investment&#8221; has the meaning assigned to it by subsection (6);<\/p>\n<p>&#8220;the reinvestor&#8221; has the meaning assigned to it by subsection (2);<\/p>\n<p>&#8220;the specified period&#8221; has the meaning assigned to it by subsection (6) (b);<\/p>\n<p>&#8220;trade&#8221; includes a profession, and &#8220;trading company&#8221;, &#8220;trading group&#8221;, &#8220;qualifying trade&#8221; (within the meaning of subsection (8)) and &#8220;qualifying trading operations&#8221; (within the meaning of that subsection) shall be construed accordingly;<\/p>\n<p>&#8220;trading company&#8221; means a company whose business consists wholly or mainly of the carrying on of a trade or trades;<\/p>\n<p>&#8220;trading group&#8221; means a holding company and one or more trading companies which are 51 per cent subsidiaries of the holding company;<\/p>\n<p>&#8220;unquoted company&#8221; means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or quoted on an unlisted securities market of a stock exchange;<\/p>\n<p>&#8220;51 per cent subsidiary&#8221; has the meaning assigned to it by section 9.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to this section, where the consideration which an individual (in this section referred to as &#8220;the reinvestor&#8221;) obtains for any material disposal, before 4 December 2002, by him or her of shares in or securities of any company (in this section referred to as &#8220;the original holding&#8221;) is applied by him or her within the period of 3 years from the date of that disposal in acquiring a qualifying investment, the reinvestor shall, on making a claim in that behalf, be treated for the purposes of the Capital Gains Tax Acts as if the chargeable gain accruing on the disposal of the original holding did not accrue until he or she disposes of the qualifying investment.<\/p>\n<p>(b)Notwithstanding paragraph (a), where &#8211;<\/p>\n<p>(i)the disposal of the qualifying investment is a material disposal for the purposes of this section, and<\/p>\n<p>(ii)the consideration for that disposal is applied by the reinvestor within the period of 3 years from the date of that disposal in acquiring another qualifying investment,<\/p>\n<p>the reinvestor shall be treated as if the chargeable gain accruing on the disposal of the original holding did not accrue until he or she disposes of the other qualifying investment and any further qualifying investment which is acquired in a similar manner.<\/p>\n<p>(3)<\/p>\n<p>(a)Where an individual is not entitled to be treated in accordance with subsection (2) solely by reason of not having satisfied the requirements of either or both paragraphs (a) and (e) of subsection (6), and &#8211;<\/p>\n<p>(i)all the other requirements of this section have been satisfied,<\/p>\n<p>(ii)the capital gains tax on the disposal of the original holding has been paid in full, and<\/p>\n<p>(iii)the individual has, throughout a period of 2 years beginning within the specified period, been a full-time employee or a full-time director of the qualifying company,<\/p>\n<p>then, the individual &#8211;<\/p>\n<p>(I)shall be entitled on making a claim in that behalf to such repayment of capital gains tax as would secure that the tax which is ultimately borne by the individual does not exceed the tax which would have been borne by the individual if he or she had been entitled to be treated in accordance with subsection (2), and<\/p>\n<p>(II)shall be treated for the purposes of the Capital Gains Tax Acts as if the chargeable gain accruing on the disposal of the original holding did not accrue until the individual disposes of the qualifying investment, and subsection (2) (b) shall apply for the purposes of this subsection as it applies for the purposes of subsection (2).<\/p>\n<p>(b)No repayment of tax under this subsection shall carry interest.<\/p>\n<p>(4)Subsection (2) shall not apply if part only of the amount or value of the consideration for the material disposal of the original holding is applied, within the period of 3 years from the date of that disposal, in acquiring a qualifying investment but, if all of the amount of that consideration except for a part which is less than the amount of the gain accruing on the disposal is so applied, the reinvestor shall, on making a claim in that behalf, be treated for the purposes of the Capital Gains Tax Acts as if the amount of the gain accruing on the disposal were reduced to the amount of the consideration not applied in acquiring a qualifying investment, and the balance of the gain shall be treated as if it did not accrue until the reinvestor disposes of the qualifying investment.<\/p>\n<p>(5)For the purposes of this section, the disposal of shares in or securities of a company shall be a material disposal if &#8211;<\/p>\n<p>(a)throughout the period of 3 years ending with the date of the disposal, or<\/p>\n<p>(b)in a case where the company commenced to trade at any time in the period mentioned in paragraph (a), throughout the period beginning at that time and ending with the date of the disposal,<\/p>\n<p>the following conditions are satisfied &#8211;<\/p>\n<p>(i)the company has been a trading company or a holding company, and<\/p>\n<p>(ii)the reinvestor has been a full-time employee, part-time employee, full-time director or part-time director of the company or, if that company is a member of a trading group, of one or more companies which are members of the trading group.<\/p>\n<p>(6)For the purposes of this section, an individual shall be regarded as acquiring a qualifying investment where he or she acquires any eligible shares in a qualifying company if &#8211;<\/p>\n<p>(a)he or she holds not less than 5 per cent of the ordinary share capital of the company at any time in the period (in this subsection referred to as &#8220;the initial period&#8221;) beginning on the date of the acquisition of the eligible shares and ending on the date which is one year after the date of the disposal of the original holding,<\/p>\n<p>(b)he or she holds not less than 15 per cent of the ordinary share capital of the company at any time in the period (in this section referred to as &#8220;the specified period&#8221;) beginning on the date of the acquisition of the eligible shares and ending on the date which is 3 years after the date of the disposal of the original holding,<\/p>\n<p>(c)within the specified period, the company uses the money raised through the issue of the eligible shares for the purposes of enabling it, or enlarging its capacity, to undertake qualifying trading operations (within the meaning of subsection (8)),<\/p>\n<p>(d)the company is not &#8211;<\/p>\n<p>(i)the company in which the original holding has subsisted, or<\/p>\n<p>(ii)a company that was a member of the same trading group as that company,<\/p>\n<p>and<\/p>\n<p>(e)he or she becomes at any time within the initial period, and is throughout the period beginning at that time and &#8211;<\/p>\n<p>(i)ending at the end of the specified period, or<\/p>\n<p>(ii)in a case where the company is wound up or dissolved without winding up and the conditions mentioned in subsection (7) (d) are satisfied, ending at the time of the commencement of the winding up or dissolution of the company,<\/p>\n<p>a full-time employee or a full-time director of the company.<\/p>\n<p>(7)<\/p>\n<p>(a)For the purposes of this section and subject to paragraphs (b) to (d), a company shall be a qualifying company if it is incorporated in the State and if &#8211;<\/p>\n<p>(i)it is throughout the specified period &#8211;<\/p>\n<p>(I)an unquoted company resident in the State and not resident elsewhere, and<\/p>\n<p>(II)a company which exists wholly for the purposes of carrying on wholly or mainly in the State of one or more qualifying trades,<\/p>\n<p>and<\/p>\n<p>(ii)it is not at any time in the specified period &#8211;<\/p>\n<p>(I)under the control of another company (or of another company and any person connected with that other company), or<\/p>\n<p>(II)without being under the control of another company, a 51 per cent subsidiary of that other company.<\/p>\n<p>(b)A company shall be deemed not to have ceased to be a qualifying company solely by virtue of shares in the company commencing, at any time in the specified period, to be quoted on the market known as the Developing Companies Market of the Irish Stock Exchange.<\/p>\n<p>(c)A company shall cease to be a qualifying company if at any time in the specified period a resolution is passed, or an order is made, for the winding up of the company (or in the case of a winding up otherwise than under the Companies Act 2014, any other act is done for the like purpose) or the company is dissolved without winding up.<\/p>\n<p>(d)Notwithstanding paragraph (c), a company shall be deemed not to have ceased to be a qualifying company solely by virtue of the application of that paragraph where &#8211;<\/p>\n<p>(i)it is shown that the winding up or dissolution is for bona fide commercial reasons and does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of income tax, corporation tax or capital gains tax, and<\/p>\n<p>(ii)the company&#8217;s net assets, if any, are distributed to its members within 3 years from the commencement of the dissolution or the winding up.<\/p>\n<p>(8)<\/p>\n<p>(a)In this subsection, &#8220;qualifying trading operations&#8221;, in relation to a trade, means all the operations of the trade excluding those of dealing in shares, securities, land, currencies, futures or traded options.<\/p>\n<p>(b)A trade shall be a qualifying trade for the purposes of subsection (7) if throughout the specified period the trade &#8211;<\/p>\n<p>(i)is conducted on a commercial basis and with a view to the realisation of profits, and<\/p>\n<p>(ii)consists wholly or mainly of qualifying trading operations,<\/p>\n<p>and a trade which during the specified period consists partly of qualifying trading operations and partly of other trading operations shall be regarded for the purposes of this subsection as a trade which consists wholly or mainly of qualifying trading operations only if the total amount receivable in the specified period by the company carrying on the trade from sales made and services rendered in the course of qualifying trading operations is not less than 75 per cent of the total amount receivable by the company from all sales made and services rendered in the course of the trade in the specified period.<\/p>\n<p>(9)A claim for relief under this section may be made after the making of a material disposal and the acquisition of eligible shares in a qualifying company if all the conditions for the relief are or will be satisfied, but the relief shall be withdrawn if, by reason of the subsequent happening of any event or failure of an event to happen which at the time the relief was claimed was expected to happen, the individual by whom the relief was claimed is not entitled to the relief so claimed.<\/p>\n<p>(10)The withdrawal of relief under subsection (9) shall be made &#8211;<\/p>\n<p>(a)for the year of assessment in which the happening or failure to happen, as the case may be, of the event giving rise to the withdrawal of the relief occurred, and<\/p>\n<p>(b)in accordance with subsection (11),<\/p>\n<p>and both &#8211;<\/p>\n<p>(i)details of the happening or the failure to happen, as the case may be, of the event giving rise to the withdrawal of relief, and<\/p>\n<p>(ii)the amount to be treated as a gain under subsection (11),<\/p>\n<p>shall be included in the return required to be made by the individual concerned under Chapter 3 of Part 41A for that year of assessment.<\/p>\n<p>(11)<\/p>\n<p>(a)Notwithstanding any other provision of the Capital Gains Tax Acts, where relief is to be withdrawn under subsection (9) for any year of assessment, such amount (in this subsection referred to as &#8220;the relevant amount&#8221;) of the chargeable gain which accrued to the reinvestor on the disposal of the original holding as was treated under subsection (2) or (4) as not accruing at that time &#8211;<\/p>\n<p>(i)reduced in accordance with paragraph (b), and<\/p>\n<p>(ii)increased in accordance with paragraph (c),<\/p>\n<p>shall be treated as a gain which accrued in that year of assessment.<\/p>\n<p>(b)The amount by which the relevant amount is to be reduced under paragraph (a) (i) is an amount equal to the aggregate of &#8211;<\/p>\n<p>(i)to the extent that such excess has not been deducted in years of assessment subsequent to the year of assessment in which the disposal of the original holding occurred, the excess of the amount of the losses which would have been deducted under section 31 in the year of assessment in which the disposal of the original holding occurred, if relief under this section had not been claimed, over the amount of such losses which were so deducted in that year, and<\/p>\n<p>(ii)any amount of chargeable gains in the year of assessment in which the disposal of the original holding occurred in respect of which the reinvestor would not by virtue of section 601 have been charged to capital gains tax if relief under this section had not been claimed.<\/p>\n<p>(c)The amount by which the relevant amount is to be increased under paragraph (a) (ii) is an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Gis the relevant amount reduced in accordance with paragraph (b),<\/p>\n<p>Ris 0.083, and<\/p>\n<p>Mis the number of months in the period beginning on the date on which capital gains tax for the year of assessment in which the disposal of the original holding occurred was due and payable and ending on the date on which capital gains tax for the year of assessment for which the withdrawal of relief is to be made is due and payable.<\/p>\n<p>(12)A chargeable gain or the balance of a chargeable gain which under subsection (2) or (4), as may be appropriate, is treated as accruing at a date later than the date of the disposal on which it accrued shall not be so treated for the purposes of section 556.<\/p>\n<p>(13)Without prejudice to the provisions of the Capital Gains Tax Acts providing generally for apportionments, where consideration is given for the acquisition or disposal of any assets some or part of which are shares or other securities to the acquisition or disposal of which a claim under this section relates and some or part of which are not, the consideration shall be apportioned in such manner as is just and reasonable.<\/p>\n<p>(14)This section shall not apply unless the acquisition of a qualifying investment was made for bona fide commercial reasons and not wholly or partly for the purposes of realising a gain from the disposal of the qualifying investment.<\/p>\n<p>591A.<\/p>\n<h4>Dividends paid in connection with disposals of shares or securities.<\/h4>\n<p>(1)For the purposes of this section, a dividend paid, or a distribution made, by a company to a person in respect of shares or securities of the company in connection with a disposal of shares in the company shall be treated as being abnormal if the amount or value of the dividend, or as the case may be the distribution, exceeds the amount that could reasonably have been expected to be paid, or as the case may be made, in respect of the shares or securities of the company if there were no such disposal of the shares or securities.<\/p>\n<p>(2)Where, in connection with the disposal by a person of any shares or securities of a company, there exists any scheme, arrangement or understanding by virtue of which, either directly or indirectly, an abnormal dividend is paid, or an abnormal distribution is made &#8211;<\/p>\n<p>(a)where the person is a company, to that person or to any company connected (within the meaning of section 10) with that person, and<\/p>\n<p>(b)where the person is not a company, to any company connected (within the meaning of section 10) with the person,<\/p>\n<p>then, for the purposes of the Capital Gains Tax Acts, the amount or value of the dividend paid, or distribution made, to the person or, as the case may be, to the connected person, shall be treated as consideration received by the person for the disposal of the shares or securities, and shall be ignored for the purposes of the Tax Acts.<\/p>\n<p>(3)Subsection (2) does not apply if it is shown that the scheme, arrangement or understanding is effected for bona fide commercial reasons and is not, or does not form part of, any scheme, arrangement or understanding of which the main purpose or one of the main purposes is avoidance of liability to tax.<\/p>\n<p>592.<\/p>\n<p>Reduced rate of capital gains tax on certain disposals of shares by individuals.<\/p>\n<p>Repealed from 3 December 1997<br \/>\n(1)In this section &#8211;<\/p>\n<p>&#8220;disposal&#8221; does not include a relevant disposal within the meaning of section 648;<\/p>\n<p>&#8220;ordinary share capital&#8221; has the same meaning as in section 2;<\/p>\n<p>&#8220;ordinary shares&#8221; means shares forming part of a company&#8217;s ordinary share capital;<\/p>\n<p>&#8220;period of ownership&#8221;, in relation to an individual making a disposal of qualifying shares, means the individual&#8217;s period of continuous ownership of the shares in the same capacity ending on the date of such disposal and, for the purposes of this definition, where the shares were acquired by the individual on the death of that individual&#8217;s spouse so that the individual&#8217;s period of ownership would apart from this definition be treated as having commenced on the date of that death, the individual&#8217;s period of ownership shall be deemed to be extended to include the individual&#8217;s spouse&#8217;s period of ownership ending on that date;<\/p>\n<p>&#8220;qualifying company&#8221; shall be construed in accordance with subsection (2);<\/p>\n<p>&#8220;qualifying shares&#8221;, in relation to a company, means ordinary shares of the company which are fully paid up and which carry no present or future preferential rights to dividends or to the company&#8217;s assets on its winding up and no present or future preferential right to be redeemed;<\/p>\n<p>&#8220;qualifying trade&#8221; shall be construed in accordance with subsection (4);<\/p>\n<p>&#8220;qualifying trading operations&#8221;, in relation to a trade, means all the operations of the trade excluding those of dealing in shares, securities, land, currencies, futures or traded options;<\/p>\n<p>&#8220;the specified period&#8221;, in relation to the disposal of qualifying shares, means the period of 3 years immediately preceding the date of the disposal of those shares;<\/p>\n<p>&#8220;trade&#8221; includes a profession, and &#8220;qualifying trade&#8221; and &#8220;qualifying trading operations&#8221; shall be construed accordingly;<\/p>\n<p>&#8220;unquoted company&#8221; means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or quoted on an unlisted securities market.<\/p>\n<p>(2)For the purposes of this section, a company shall be a qualifying company in relation to the disposal of qualifying shares where &#8211;<\/p>\n<p>(a)at the date of acquisition of those shares, it is an unquoted company which is resident in the State and not resident elsewhere and which has an issued share capital the market value of which is not more than \u00a325,000,000, and<\/p>\n<p>(b)throughout the specified period, it is a company which is resident in the State and not resident elsewhere and &#8211;<\/p>\n<p>(i)which exists wholly or mainly for the purposes of the carrying on of one or more qualifying trades, or<\/p>\n<p>(ii)the business of which consists &#8211;<\/p>\n<p>(I)wholly or mainly of the holding of shares in one or more connected companies, or<\/p>\n<p>(II)wholly or mainly of both the holding of such shares and the carrying on of one or more qualifying trades.<\/p>\n<p>(3)<\/p>\n<p>(a)A company shall be regarded as having satisfied the condition referred to in subsection (2)(b)(i) only if throughout the specified period not less than 75 per cent of the market value of all the issued share capital of the company derives from the carrying on by the company of one or more qualifying trades.<\/p>\n<p>(b)A company shall be regarded as having satisfied the condition referred to in clause (I) or (II), as the case may be, of subsection (2)(b)(ii) only if throughout the specified period not less than 75 per cent of the market value of all the issued share capital of the company derives from the carrying on of one or more qualifying trades by the connected companies or, as the case may be, by the company and the connected companies.<\/p>\n<p>(c)In a case where a connected company (in this paragraph referred to as &#8220;the first-mentioned company&#8221;) is a company whose business consists of the holding of shares in one or more companies, references in paragraph (b) to the connected companies shall be construed as including references to the companies which are connected with the first-mentioned company.<\/p>\n<p>(4)For the purposes of this section, a trade shall be a qualifying trade if throughout the specified period it consists of qualifying trading operations and, where during that period a trade consists partly of qualifying trading operations and partly of other trading operations, the part of the trade which consists of other trading operations shall be treated as a separate trade.<\/p>\n<p>(5)For the purposes of this section, where a company (in this subsection referred to as &#8220;the first-mentioned company&#8221;) holds shares in another company, that other company shall be regarded as connected with the first-mentioned company if &#8211;<\/p>\n<p>(a)at the date of the acquisition of those shares by the first-mentioned company it was an unquoted company,<\/p>\n<p>(b)it is resident in the State and not resident elsewhere, and<\/p>\n<p>(c)not less than 20 per cent of the total voting rights in the company are exercisable by the first-mentioned company.<\/p>\n<p>(6)As respects chargeable gains accruing to an individual on the disposal of qualifying shares in a qualifying company in a case where the individual&#8217;s period of ownership of those shares is not less than 3 years, section 28(3) shall apply as if the reference in that section to 40 per cent were a reference to 26 per cent.<\/p>\n<p>(7)<\/p>\n<p>(a)In this subsection and in subsection (8), &#8220;original shares&#8221; and &#8220;new holding&#8221; have the same meanings respectively as in section 584.<\/p>\n<p>(b)If the time when an individual acquires qualifying shares would be determined under section 584, 585, 586 or 587, it shall be determined in the same way for the purposes of this section where the following conditions are satisfied &#8211;<\/p>\n<p>(i)both the original shares and the new holding constitute qualifying shares, and<\/p>\n<p>(ii)the individual is not treated under section 584(4) as giving or becoming liable to give any consideration, other than the original shares, for the acquisition of the new holding.<\/p>\n<p>(8)<\/p>\n<p>(a)In a case where subsection (7)(b) applies and the new holding is held for a period of not less than 3 years, subsection (2) shall apply as if &#8211;<\/p>\n<p>(i)in paragraph (a) of that subsection &#8220;at the date of acquisition of the original shares&#8221; were substituted for &#8220;at the date of acquisition of those shares&#8221;,<\/p>\n<p>(ii)where the company in which the new holding subsists is not the company in which the original shares subsisted, in paragraph (a) of that subsection &#8220;the company in which the original shares subsisted is&#8221; were substituted for &#8220;it is&#8221;, and<\/p>\n<p>(iii)in paragraph (b) of that subsection &#8220;the company in which the new holding subsists is&#8221; were substituted for &#8220;it is&#8221;.<\/p>\n<p>(b)In a case where subsection (7)(b) applies and the new holding is held for a period of less than 3 years, subsection (2) shall apply &#8211;<\/p>\n<p>(i)as if in paragraph (a) of that subsection &#8220;at the date of acquisition of the original shares&#8221; were substituted for &#8220;at the date of acquisition of those shares&#8221;, and<\/p>\n<p>(ii)where the company in which the new holding subsists is not the company in which the original shares subsisted as if &#8211;<\/p>\n<p>(I)in paragraph (a) of that subsection &#8220;the company in which the original shares subsisted is&#8221; were substituted for &#8220;it is&#8221;,<\/p>\n<p>(II)in paragraph (b) of that subsection &#8220;throughout that part of the specified period commencing on the date of the acquisition of the new holding, the company in which the new holding subsists is&#8221; were substituted for &#8220;throughout the specified period, it is&#8221;, and<\/p>\n<p>(III)the conditions referred to in paragraph (b) of that subsection applied also to the company in which the original shares subsisted but only in relation to the part of the specified period which does not include the part of that period mentioned in clause (II).<\/p>\n<p>&nbsp;<\/p>\n<p>Part 20<\/p>\n<h4>Companies&#8217; Chargeable Gains (ss. 614-629C)<\/h4>\n<p>Chapter 1<\/p>\n<h4>General<\/h4>\n<p>(ss. 614-626C)<\/p>\n<p>614.<\/p>\n<h4>Capital distribution derived from chargeable gain of company: recovery of tax from shareholder.<\/h4>\n<p>(1)In this section, &#8220;capital distribution&#8221; has the same meaning as in section 583.<\/p>\n<p>(2)This section shall apply where a person connected with a company resident in the State receives or becomes entitled to receive in respect of shares in the company any capital distribution from the company, other than a capital distribution representing a reduction of capital, and &#8211;<\/p>\n<p>(a)the capital so distributed derives from the disposal after the 5th day of April, 1976, of assets in respect of which a chargeable gain accrues to the company, or<\/p>\n<p>(b)the distribution constitutes such a disposal of assets.<\/p>\n<p>(3)Where the corporation tax assessed on the company for the accounting period in which the chargeable gain accrues included any amount in respect of chargeable gains, and any of the tax assessed on the company for that period is not paid within 6 months from the date when it becomes payable by the company, the person referred to in subsection (2) may by an assessment made within 2 years from that date be assessed and charged (in the name of the company) to an amount of that corporation tax &#8211;<\/p>\n<p>(a)not exceeding the amount or value of the capital distribution which that person has received or became entitled to receive, and<\/p>\n<p>(b)not exceeding a proportion equal to that person&#8217;s share of the capital distribution made by the company of corporation tax on the amount and at the rate charged in respect of that gain in the assessment in which that tax was charged.<\/p>\n<p>(4)A person paying any amount of tax under this section shall be entitled to recover a sum equal to that amount from the company.<\/p>\n<p>(5)This section is without prejudice to any liability of the person receiving or becoming entitled to receive the capital distribution in respect of a chargeable gain accruing to such person by reference to the capital distribution as constituting a disposal of an interest in shares in the company.<\/p>\n<p>615.<\/p>\n<h4>Company reconstruction or amalgamation: transfer of assets.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;scheme of reconstruction or amalgamation&#8221; means a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies;<\/p>\n<p>&#8220;trading stock&#8221; has the same meaning as in section 89.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to this section, where &#8211;<\/p>\n<p>(i)any scheme of reconstruction or amalgamation involves the transfer of the whole or part of a company&#8217;s business to another company,<\/p>\n<p>(ii)<\/p>\n<p>(I)the company acquiring the assets is resident in the State at the time of the acquisition, or the assets are chargeable assets in relation to that company immediately after that time, and<\/p>\n<p>(II)the company from which the assets are acquired is resident in the State at the time of the acquisition, or the assets are chargeable assets in relation to that company immediately before that time,<\/p>\n<p>(iii)the first-mentioned company receives no part of the consideration for the transfer (otherwise than by the other company taking over the whole or part of the liabilities of the business), and<\/p>\n<p>(iv)the company acquiring the assets is not &#8211;<\/p>\n<p>(I)an authorised investment company (within the meaning of Part XIII of the Companies Act 1990) that is an investment undertaking (within the meaning of section 739B), or<\/p>\n<p>(II)an authorised ICAV (within the meaning of section 2 of the Irish Collective Asset-management Vehicles Act 2015 (No. 2 of 2015)),<\/p>\n<p>then, in so far as relates to corporation tax on chargeable gains, both companies shall be treated as if any assets included in the transfer were acquired by the one company from the other company for a consideration of such amount as would secure that on the disposal by means of the transfer neither a gain nor a loss would accrue to the company making the disposal, and for the purposes of section 556 the acquiring company shall be treated as if the respective acquisitions of the assets by the other company had been the acquiring company&#8217;s acquisition of the assets.<\/p>\n<p>(b)For the purposes of paragraph (a) &#8211;<\/p>\n<p>(i)an asset is a &#8216;chargeable asset&#8217; in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain, and<\/p>\n<p>(ii)a reference to a company shall apply only to a company which, by virtue of the law of a relevant Member State, is resident for the purposes of tax in such a Member State, and for this purpose &#8211;<\/p>\n<p>&#8216;relevant Member State&#8217;, in addition to the meaning assigned to that expression by section 616(7), shall be deemed to include the United Kingdom;<\/p>\n<p>&#8216;tax&#8217;, in relation to a relevant Member State other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.<\/p>\n<p>(2A)<\/p>\n<p>(a)In this subsection \u2018division\u2019, \u2018merger\u2019, \u2018successor company\u2019 and \u2018transferor company\u2019 have the same meaning as in section 638A (inserted by the Finance Act 2017).<\/p>\n<p>(b)This section shall apply as if the transfer from a transferor company of all its assets to a successor company as a result of a merger or a division were the transfer of the whole of the company\u2019s business and all the liabilities of the transferor company were the liabilities of the business of that transferor company where, immediately before the merger or division, the transferor company carried on a business.<\/p>\n<p>(3)This section shall not apply in relation to an asset which until the transfer formed part of trading stock of a trade carried on by the company making the disposal, or in relation to an asset which is acquired as trading stock for the purposes of a trade carried on by the company acquiring the asset.<\/p>\n<p>(4)<\/p>\n<p>(a)This section shall not apply in relation to the transfer of a specified intangible asset within the meaning of section 291A where the company acquiring the asset and the company from which the asset is acquired jointly so elect by giving notice, not later than 12 months from the end of the accounting period in which the company acquired the asset, to the Collector-General in such manner as the Revenue Commissioners may require.<\/p>\n<p>(b)Where &#8211;<\/p>\n<p>(i)an election is made under paragraph (a) in relation to the transfer of a specified intangible asset, and<\/p>\n<p>(ii)that transfer is not a transfer to which section 400(6) applies,<\/p>\n<p>then, for the purposes of computing any chargeable gain, the transfer of that asset shall be treated, as respects &#8211;<\/p>\n<p>(I)the disposal by the company from which the asset was acquired, and<\/p>\n<p>(II)the acquisition by the company acquiring the asset,<\/p>\n<p>as having been made for a consideration equal to the market value of the asset on the date of that transfer.<\/p>\n<p>(4A)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8216;arrangement&#8217; includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);<\/p>\n<p>&#8216;tax&#8217; means income tax, corporation tax or capital gains tax.<\/p>\n<p>(b)This section shall not apply to a scheme of reconstruction or amalgamation involving the transfer of the whole or part of a company&#8217;s business to another company unless it is shown that the reconstruction or amalgamation is effected for bona fide commercial reasons and does not form part of an arrangement the main purpose, or one of the main purposes, of which is the avoidance of liability to tax.<\/p>\n<p>616.<\/p>\n<h4>Groups of companies: interpretation.<\/h4>\n<p>(1)For the purposes of this section and of the following sections of this Chapter &#8211;<\/p>\n<p>(a)subject to sections 617(5), 621(1) and 623(7), a reference to a company or companies shall apply only to a company or companies, as limited by subsection (2), being a company or, as the case may be, companies which, by virtue of the law of a relevant Member State, is or are resident for the purposes of tax in such a relevant Member State, and for this purpose &#8211;<\/p>\n<p>&#8216;relevant Member State&#8217;, in addition to the meaning assigned to that expression by subsection (7), shall be deemed to include the United Kingdom;<\/p>\n<p>&#8216;tax&#8217;, in relation to a relevant Member State other than the State, means any tax imposed in the relevant Member State which corresponds to corporation tax in the State;<\/p>\n<p>and references to a member or members of a group of companies shall be construed accordingly;<\/p>\n<p>(b)a company is an effective 75 per cent subsidiary of another company (in this paragraph referred to as &#8216;the parent&#8217;) at any time if at that time &#8211;<\/p>\n<p>(i)the company is a 75 per cent subsidiary (within the meaning of section 9) of the parent,<\/p>\n<p>(ii)the parent is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the company, and<\/p>\n<p>(iii)the parent would be beneficially entitled to not less than 75 per cent of the assets of the company available for distribution to its equity holders on a winding up,<\/p>\n<p>and sections 413 to 419 shall apply for the purposes of this paragraph as they apply for the purposes of Chapter 5 of Part 12;<\/p>\n<p>(bb)a principal company and all its effective 75 per cent subsidiaries shall form a group, and where a principal company is a member of a group as being itself an effective 75 per cent subsidiary that group shall comprise all its effective 75 per cent subsidiaries;<\/p>\n<p>(c)&#8221;principal company&#8221; means a company of which another company is an effective 75 per cent subsidiary;<\/p>\n<p>(d)in applying the definition of &#8220;75 per cent subsidiary&#8221; in section 9, any share capital of a registered industrial and provident society shall be treated as ordinary share capital;<\/p>\n<p>(e)&#8221;group&#8221; and &#8220;subsidiary&#8221; shall be construed with any necessary modifications where applied to a company incorporated under the law of a country outside the State;<\/p>\n<p>(f)an asset is a &#8216;chargeable asset&#8217; in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain.<\/p>\n<p>(g)Notwithstanding paragraph (b) &#8211;<\/p>\n<p>(i)a company (in this paragraph referred to as the &#8216;first-mentioned company&#8217;) shall be an effective 75 per cent subsidiary of the National Asset Management Agency where that Agency directly owns any part of the ordinary share capital of that company, and<\/p>\n<p>(ii)any other company which is an effective 75 per cent subsidiary of the first-mentioned company shall be an effective 75 per cent subsidiary of the National Asset Management Agency.<\/p>\n<p>(2)For the purposes of this section and of the following sections of this Part, references to a company shall apply only to &#8211;<\/p>\n<p>(a)a company within the meaning of the Companies Act 2014,<\/p>\n<p>(b)a company constituted under any other Act or a charter or letters patent or formed under the law of a country or territory outside the State,<\/p>\n<p>(c)a registered industrial and provident society, being a society within the meaning of section 698, and<\/p>\n<p>(d)a building society incorporated or deemed by virtue of section 124(2) of the Building Societies Act, 1989, to be incorporated under that Act.<\/p>\n<p>(3)For the purposes of this section and of the following sections of this Part, a group shall remain the same group so long as the same company remains the principal company of the group and, if at any time the principal company of a group becomes an effective 75 per cent subsidiary of another company, the group of which it was the principal company before that time shall be regarded as the same as the group of which that other company is the principal company or an effective 75 per cent subsidiary, and the question whether or not a company has ceased to be a member of a group shall be determined accordingly.<\/p>\n<p>(3A)Where at any time the principal company of a group &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)becomes an SE by reason of being the acquiring company in the formation of an SE by merger by acquisition (in accordance with Articles 2(1), 17(2)(a) and 29(1) of the SE Regulation (within the meaning of section 630)),<\/p>\n<p>(ii)becomes a subsidiary of a holding SE (formed in accordance with Article 2(2) of that Regulation), or<\/p>\n<p>(iii)is transformed into an SE (in accordance with Article 2(4) of that Regulation),<\/p>\n<p>or<\/p>\n<p>(b)becomes an SCE in the course of a merger in accordance with Article 2 of the SCE Regulation (within the meaning of section 630),<\/p>\n<p>then the group of which it was the principal company before that time and any group of which the SE, or as the case may be the SCE, is a member on formation shall be regarded as the same, and the question of whether or not a company has ceased to be a member of a group shall be determined accordingly.<\/p>\n<p>(4)For the purposes of this section and of the following sections of this Part, the passing of a resolution or the making of an order or any other act for the winding up of a company shall not be regarded as the occasion of that company or of any effective 75 per cent subsidiary of that company ceasing to be a member of a group of companies.<\/p>\n<p>(5)<\/p>\n<p>(a)The following sections of this Part, except in so far as they relate to the recovery of tax, shall also apply in relation to bodies from time to time established by or under any enactment for the carrying on of any industry or part of an industry, or of any undertaking, under national ownership or control as if &#8211;<\/p>\n<p>(i)such bodies were companies within the meaning of those sections,<\/p>\n<p>(ii)any such bodies charged with related functions and subsidiaries of any of them formed a group, and<\/p>\n<p>(iii)any 2 or more such bodies charged at different times with the same or related functions were members of a group.<\/p>\n<p>(b)Paragraph (a) shall apply subject to any enactment by virtue of which property, rights, liabilities or activities of one such body mentioned in that paragraph are to be treated for corporation tax as those of another such body.<\/p>\n<p>(6)For the purposes of this Part &#8211;<\/p>\n<p>(a)section 557 and all other provisions for apportioning on a part disposal expenditure which is deductible in computing a gain shall be operated before the operation of and without regard to &#8211;<\/p>\n<p>(i)section 617(1), and<\/p>\n<p>(ii)any other enactment making an adjustment to secure that neither a gain nor a loss occurs on a disposal;<\/p>\n<p>(b)section 589 shall not apply where the transfer is a disposal to which section 617(1) applies.<\/p>\n<p>(7)For the purposes of this Part &#8211;<\/p>\n<p>&#8220;EEA Agreement&#8221; means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;<\/p>\n<p>&#8220;EEA State&#8221; means a state which is a contracting party to the EEA Agreement;<\/p>\n<p>&#8220;relevant Member State&#8221; means &#8211;<br \/>\n(a)a Member State of the European Communities, or<br \/>\n(b)not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made;<\/p>\n<p>617.<\/p>\n<h4>Transfers of assets, other than trading stock, within group.<\/h4>\n<p>(1)Notwithstanding any provision in the Capital Gains Tax Acts fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition, where &#8211;<\/p>\n<p>(a)a member of a group of companies disposes of an asset to another member of the group,<\/p>\n<p>(b)the company making the disposal is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately before that time, and<\/p>\n<p>(c)the other company &#8211;<\/p>\n<p>(i)is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately after that time, and<\/p>\n<p>(ii)is not &#8211;<\/p>\n<p>(I)an authorised investment company (within the meaning of Part 24 of the Companies Act 2014) that is an investment undertaking (within the meaning of section 739B),<\/p>\n<p>(II)a Real Estate Investment Trust (within the meaning of section 705A) or a member of a group Real Estate Investment Trust (within the meaning of section 705A), or<\/p>\n<p>(III)an authorised ICAV (within the meaning of section 2 of the Irish Collective Asset-management Vehicles Act 2015 (No. 2 of 2015)),<\/p>\n<p>both members shall, except where provided by subsections (2), (3) and (4), be treated, in so far as relates to corporation tax on chargeable gains, as if the asset acquired by the member to whom the disposal is made were acquired for a consideration of such amount as would secure that on the other member&#8217;s disposal neither a gain nor a loss would accure to that other member; but, where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale to or acquisition from another member of the group.<\/p>\n<p>(2)Subsection (1) shall not apply where the disposal is &#8211;<\/p>\n<p>(a)a disposal of a debt from a member of a group of companies effected by satisfying the debt or part of it, or<\/p>\n<p>(b)a disposal of redeemable shares in a company on the occasion of their redemption,<\/p>\n<p>and the reference in that subsection to a member of a group of companies disposing of an asset shall not apply to anything which under section 583 is to be treated as a disposal of an interest in shares in a company in consideration for a capital distribution (within the meaning of that section) from that company, whether or not involving a reduction of capital.<\/p>\n<p>(3)For the purposes of subsection (1), in so far as the consideration for the disposal consists of money or money&#8217;s worth by means of compensation for any kind of damage or injury to assets, or for the destruction or dissipation of assets or for anything which depreciates or might depreciate an asset, the disposal shall be treated as being to the person who, whether as an insurer or otherwise, ultimately bears the burden of furnishing that consideration.<\/p>\n<p>(4)Where a member of a group of companies disposes of a specified intangible asset within the meaning of section 291A to another member of the group, subsection (1) shall not apply to the disposal of that asset where the companies jointly so elect by giving notice, not later than 12 months from the end of the accounting period in which the other member of the group acquired the asset, to the Collector-General in such manner as the Revenue Commissioners may require.<\/p>\n<p>(5)For the purposes of this section, a \u2018group of companies\u2019 shall include only companies which, by virtue of the law of a relevant Member State or other territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made, are resident for the purposes of tax in such Member State or territory, as the case may be, and for this purpose \u2018tax\u2019, in relation to a relevant Member State or such territory, other than the State, means any tax imposed in the Member State or territory which corresponds to corporation tax in the State.<\/p>\n<p>617A.<\/p>\n<h4>Transfers arising from certain mergers under Companies Act 2014.<\/h4>\n<p>The transfer of all the assets and liabilities of a company which is a wholly owned subsidiary of another company (in this section referred to as the &#8216;parent company&#8217;) to the parent company as a consequence of a merger by absorption to which Chapter 3 of Part 9 of, or Chapter 16 of Part 17 of, the Companies Act 2014 applies shall not be treated as involving a disposal by the parent company of the share capital which it held in the subsidiary company immediately before the merger.<\/p>\n<p>618.<\/p>\n<h4>Transfers of trading stock within group.<\/h4>\n<p>(1)Where &#8211;<\/p>\n<p>(a)a company which is a member of a group of companies acquires an asset as trading stock of a trade to which this section applies,<\/p>\n<p>(b)the acquisition is from another company which is a member of the group, and<\/p>\n<p>(c)the asset did not form part of the trading stock of any such trade carried on by the other company,<\/p>\n<p>the company acquiring the asset shall be treated for the purposes of section 596 as having acquired the asset otherwise than as trading stock and immediately appropriated it for the purposes of the trade as trading stock.<\/p>\n<p>(2)Where a member of a group of companies disposes of an asset to another member of the group and the asset to which this section applies carried on by the member disposing of the asset but is acquired by the other member otherwise than as trading stock of a trade carried on by that other member, the member disposing of the asset shall be treated for the purposes of section 596 as having immediately before the disposal appropriated the asset for some purpose other than the purpose of use as trading stock.<\/p>\n<p>(3)This section applies to &#8211;<\/p>\n<p>(a)a trade carried on by a company which is resident in the State, and<\/p>\n<p>(b)a trade carried on in the State through a branch or agency by a company which is not so resident.<\/p>\n<p>619.<\/p>\n<h4>Disposals or acquisitions outside group.<\/h4>\n<p>(1)Where a company which is or has been a member of a group of companies disposes of an asset which it acquired from another member of the group in the course of a disposal to which section 617 applies, section 555 shall apply in relation to any capital allowances made to the other member (in so far as not taken into account in relation to a disposal of the asset by that other member), and so on as respects previous transfers of the asset between members of the group, but this shall not be taken as affecting the consideration for which an asset is deemed under section 617(1) to be acquired.<\/p>\n<p>(2)<\/p>\n<p>(a)Section 556 shall apply in relation to a disposal of an asset by a company which is or has been a member of a group of companies, and which acquired the asset from another member of the group in the course of a disposal to which section 617 applies, as if all members of the group for the time being were the same person, and as if the acquisition or provision of the asset by the group, so taken as a single person, had been the acquisition or provision of the asset by the member disposing of the asset.<\/p>\n<p>(b)Notwithstanding paragraph (a), where at any time after the asset was acquired or provided by the group so taken as a single person and before the 24th day of April, 1992, there was an acquisition (in this paragraph referred to as &#8220;the later acquisition&#8221;) of the asset by a member of the group from another member of the group as a result of a relevant disposal (within the meaning of section 648), this subsection shall apply as if the reference in paragraph (a) to the acquisition or provision of the asset by the group were a reference to the later acquisition or, where there was more than one, the last such acquisition.<\/p>\n<p>620.<\/p>\n<h4>Replacement of business assets by members of group.<\/h4>\n<p>(1)For the purposes of this section &#8216;old assets&#8217; and &#8216;new assets&#8217; have the same meanings as in section 597.<\/p>\n<p>(2)Subject to subsection (4), for the purposes of section 597 all the trades to which this section applies carried on by members of a group of companies shall be treated as a single trade (except in a case of one member of the group acquiring, or acquiring the interest in, the new assets from another member or disposing of, or disposing of the interest in, the old assets to another member).<\/p>\n<p>(3)This section applies to &#8211;<\/p>\n<p>(a)any trade carried on by a company which is resident in the State, and<\/p>\n<p>(b)any trade carried on in the State through a branch or agency of a company which is not so resident.<\/p>\n<p>(4)This section shall not apply unless &#8211;<\/p>\n<p>(a)the company disposing of the old assets is resident in the State at the time of the disposal, or the assets are chargeable assets in relation to that company immediately before that time, and<\/p>\n<p>(b)the company acquiring the new assets is resident in the State at the time of acquisition, or the assets are chargeable assets in relation to that company immediately after that time.<\/p>\n<p>620A.<\/p>\n<h4>Deemed disposal in certain circumstances.<\/h4>\n<p>(1)This section applies in relation to a company where &#8211;<\/p>\n<p>(a)at any time on or after 15 February 2001 an asset ceases to be a chargeable asset in relation to the company &#8211;<\/p>\n<p>(i)where at the time of the acquisition of the asset by the company the asset consisted of shares deriving their value or the greater part of their value from assets specified in paragraph (a) or (b) of section 29(3), by virtue of the assets ceasing to so derive their value or the greater part of their value, or<\/p>\n<p>(ii)by virtue of the asset becoming situated outside the State,<\/p>\n<p>and<\/p>\n<p>(b)<\/p>\n<p>(i)the company acquired the asset in the course of &#8211;<\/p>\n<p>(I)a transfer to which section 615 applies, or<\/p>\n<p>(II)a disposal to which section 617 applies,<\/p>\n<p>or<\/p>\n<p>(ii)by virtue of section 620 the asset constitutes new assets for the purposes of section 597.<\/p>\n<p>(2)Where this section applies in relation to a company, the company shall be deemed for the purposes of the Capital Gains Tax Acts and the Corporation Tax Acts &#8211;<\/p>\n<p>(a)to have disposed of the asset immediately before the time when it ceased to be a chargeable asset in relation to the company, and<\/p>\n<p>(b)immediately to have reacquired it,<\/p>\n<p>at its market value at that time.<\/p>\n<p>621.<\/p>\n<h4>Depreciatory transactions in group.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>&#8220;securities&#8221; includes any loan stock or similar security whether secured or unsecured;<\/p>\n<p>references to the disposal of assets include references to any method by which one company which is a member of a group appropriates the goodwill of another member of the group;<\/p>\n<p>&#8216;a group of companies&#8217; may consist of companies some or all of which are not resident for the purposes of tax in a relevant Member State.<\/p>\n<p>(2)References in this section to the disposal of shares or securities include references to the occasion of the making of a claim under section 538(2) that the value of shares or securities has become negligible, and references to a person making a disposal shall be construed accordingly.<\/p>\n<p>(3)This section shall apply as respects a disposal of shares in or securities of a company (in this section referred to as an &#8220;ultimate disposal&#8221;) if the value of the shares or securities has been materially reduced by a depreciatory transaction effected on or after the 6th day of April, 1974, and for this purpose &#8220;depreciatory transaction&#8221; means &#8211;<\/p>\n<p>(a)any disposal of assets at other than market value by one member of a group of companies to another, or<\/p>\n<p>(b)any other transaction satisfying the conditions of subsection (4);<\/p>\n<p>but a transaction shall not be treated as a depreciatory transaction to the extent that it consists of a payment which is required to be or has been taken into account, for the purposes of corporation tax on chargeable gains, in computing a chargeable gain or allowable loss accruing to the person making the ultimate disposal.<\/p>\n<p>(4)The conditions referred to in subsection (3)(b) are &#8211;<\/p>\n<p>(a)that the company, the shares in which or securities of which are the subject of the ultimate disposal, or any effective 75 per cent subsidiary of that company, was a party to the transaction, and<\/p>\n<p>(b)that the parties to the transaction were or included 2 or more companies which at the time of the transaction were members of the same group of companies.<\/p>\n<p>(5)Without prejudice to the generality of subsection (3), the cancellation of any shares in or securities of one member of a group of companies under section 72 of the Companies Act, 1963, shall, to the extent that immediately before the cancellation those shares or securities were the property of another member of the group, be taken to be a transaction fulfilling the conditions in subsection (4).<\/p>\n<p>(6)A person making an ultimate disposal who is or has at any time been a member of the group of companies referred to in subsection (3) or (4) shall, for the purposes of making a self-assessment, reduce any loss on the disposal to such an extent that the loss does not reflect any diminution in the value of the company&#8217;s assets attributable to a depreciatory transaction; but, if the person making the ultimate disposal is not a member of that group when disposing of the shares or securities, no reduction of the loss shall be made by reference to a depreciatory transaction that took place when that person was not a member of that group.<\/p>\n<p>(7)<\/p>\n<p>(a)Subject to paragraph (b), the inspector, in making an assessment, or the Appeal Commissioners, on an appeal against an assessment, shall reduce any allowable loss to such extent as appears to the inspector or the Appeal Commissioners to be just and reasonable on the basis that the loss ought not to reflect any diminution in the value of the company&#8217;s assets attributable to a depreciatory transaction.<\/p>\n<p>(b)Allowance may be made for any transaction, other than a depreciatory transaction, on or after 6 April 1974 that has enhanced the value of the company&#8217;s assets and depreciated the value of the assets of any other member of the group.<\/p>\n<p>(8)<\/p>\n<p>(a)Where, under subsection (6), a reduction is made in a loss, any chargeable gain accruing on a disposal of the shares in or securities of any other company which was a party to the depreciatory transaction by reference to which the reduction was made, being a disposal not later than 10 years after the depreciatory transaction, shall, for the purposes of the making of a self-assessment, be reduced to such an extent that the gain does not reflect any increase in the value of the company&#8217;s assets attributable to the depreciatory transaction on the value of those shares or securities at the time of their disposal.<\/p>\n<p>(aa)The inspector, in making an assessment, or the Appeal Commissioners, on an appeal against an assessment, shall reduce any chargeable gain to such an extent as appears to the inspector or the Appeal Commissioners, as the case may be, to be just and reasonable on the basis that the gain ought not to reflect any increase in the value of the company&#8217;s assets attributable to a depreciatory transaction.<\/p>\n<p>(b)Notwithstanding paragraph (a), the total amount of any one or more reductions in chargeable gains made by reference to a depreciatory transaction shall not exceed the amount of the reductions in allowable losses made by reference to that depreciatory transaction.<\/p>\n<p>(c)All such adjustments, whether by means of discharge or repayment of tax or otherwise, as are required to give effect to this subsection may be made at any time.<\/p>\n<p>622.<\/p>\n<h4>Dividend stripping.<\/h4>\n<p>(1)This section shall apply where one company (in this section referred to as &#8220;the first company&#8221;) has a holding in another company (in this section referred to as &#8220;the second company&#8221;) and the following conditions are fulfilled &#8211;<\/p>\n<p>(a)that the holding amounts to, or is an ingredient in a holding amounting to, 10 per cent of all holdings of the same class in the second company,<\/p>\n<p>(b)that the first company is not a dealing company in relation to the holding,<\/p>\n<p>(c)that a distribution is or has been made on or after the 6th day of April, 1974, to the first company in respect of the holding, and<\/p>\n<p>(d)that the effect of the distribution is that the value of the holding is or has been materially reduced.<\/p>\n<p>(2)<\/p>\n<p>(a)Where this section applies in relation to a holding, section 621 shall apply in relation to any disposal of any shares or securities comprised in the holding, whether the disposal is by the first company or by any other company to which the holding is transferred by a transfer to which section 617 applies, as if the distribution were a depreciatory transaction and, if the companies concerned are not members of a group of companies, as if they were.<\/p>\n<p>(b)Notwithstanding paragraph (a), the distribution shall not be treated as a depreciatory transaction to the extent that it consists of a payment which is required to be or has been taken into account, for the purposes of corporation tax on chargeable gains, in computing a chargeable gain or allowable loss accruing to the person making the ultimate disposal.<\/p>\n<p>(3)This section shall be construed together with section 621.<\/p>\n<p>(4)For the purposes of this section, a company shall be a dealing company in relation to a holding if a profit on the sale of the holding would be taken into account in computing the company&#8217;s trading profits.<\/p>\n<p>(5)References in this section to a holding in a company are references to a holding of shares or securities by virtue of which the holder may receive distributions made by the company, but so that &#8211;<\/p>\n<p>(a)a company&#8217;s holdings of different classes in another company shall be treated as separate holdings, and<\/p>\n<p>(b)holdings of shares or securities which differ in the entitlements or obligations they confer or impose shall be regarded as holdings of different classes.<\/p>\n<p>(6)For the purposes of subsection (1) &#8211;<\/p>\n<p>(a)all a company&#8217;s holdings of the same class in another company shall be treated as ingredients constituting a single holding, and<\/p>\n<p>(b)a company&#8217;s holding of a particular class shall be treated as an ingredient in a holding amounting to 10 per cent of all holdings of that class if the aggregate of that holding and other holdings of that class held by connected persons amounts to 10 per cent of all holdings of that class.<\/p>\n<p>623.<\/p>\n<h4>Company ceasing to be member of group.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>(a)2 or more companies shall be associated companies if by themselves they would form a group of companies;<\/p>\n<p>(b)a chargeable gain shall be deferred on a replacement of business assets if, by one or more claims under section 597, a chargeable gain on the disposal of those assets is treated as not accruing until the new assets within the meaning of that section cease to be used for the purpose of a trade carried on by the company making the claim;<\/p>\n<p>(c)an asset acquired by the chargeable company shall be treated as the same as an asset owned at a later time by that company or an associated company if the value of the second asset is derived in whole or in part from the first asset, and in particular where the second asset is a freehold, and the first asset was a leasehold and the lessee has acquired the reversion;<\/p>\n<p>(d)references to a company ceasing to be a member of a group of companies shall not apply to cases where a company ceases to be a member of a group by being wound up or dissolved or in consequence of another member of the group being wound up or dissolved where the winding up or dissolution of the member or the other member, as the case may be, is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.<\/p>\n<p>(2)Subject to subsection (2A), this section applies where &#8211;<\/p>\n<p>(a)a company (in this section referred to as the &#8216;chargeable company&#8217;) which is a member of a group of companies acquires an asset from another company which at the time of acquisition was a member of the group.<\/p>\n<p>(b)the chargeable company ceases to be a member of the group within the period of 10 years after the time of the acquisition,<\/p>\n<p>(c)the chargeable company is resident in the State at the time of acquisition of the asset, or the asset is a chargeable asset in relation to that company immediately after that time, and<\/p>\n<p>(d)the other company is resident in the State at the time of that acquisition, or the asset is a chargeable asset in relation to that company immediately before that time.<\/p>\n<p>(2A)<\/p>\n<p>(a)This section does not apply to a bank asset where that asset is acquired on or after the establishment day by &#8211;<\/p>\n<p>(i)NAMA, or<\/p>\n<p>(ii)a company to which section 616(1)(g) relates from that Agency or a company to which that paragraph relates.<\/p>\n<p>(b)In this subsection &#8216;bank asset&#8217;, &#8216;establishment day&#8217; and &#8216;NAMA&#8217; have the same meanings, respectively, as they have in the National Asset Management Agency Act 2009.<\/p>\n<p>(3)<\/p>\n<p>(a)Where 2 or more associated companies (in this subsection referred to as &#8220;the associated companies&#8221;) cease to be members of a group at the same time &#8211;<\/p>\n<p>(i)subsection (2) shall not apply as respects an acquisition by one from another of the associated companies, and<\/p>\n<p>(ii)where &#8211;<\/p>\n<p>(I)a dividend has been paid or a distribution has been made by one of the associated companies to a company which is not one of the associated companies, and<\/p>\n<p>(II)the dividend so paid or the distribution so made has been paid or made, as the case may be, wholly or partly out of profits which derive from the disposal of any asset by one to another of the associated companies,<\/p>\n<p>the amount of the dividend paid or the amount or value of the distribution made, to the extent that it is paid or made, as the case may be, out of those profits, shall be deemed for the purposes of the Capital Gains Tax Acts to be consideration (in addition to any other consideration) received by the member of the group or former member of the group in respect of a disposal, being a disposal which gave rise to or was caused by the associated companies ceasing to be members of the group.<\/p>\n<p>(b)Paragraph (a)(ii) shall not apply to a distribution other than a dividend where a company ceases to be a member of a group of companies before the 23rd day of April, 1996.<\/p>\n<p>(4)If when the chargeable company ceases to be a member of the group the chargeable company, or an associated company also leaving the group, owns otherwise than as trading stock &#8211;<\/p>\n<p>(a)the asset referred to in subsection (2), or<\/p>\n<p>(b)property on the acquisition of which a chargeable gain in relation to the asset has been deferred on a replacement of business assets,<\/p>\n<p>the chargeable company shall be treated for the purposes of the Capital Gains Tax Acts as if immediately after its acquisition of the asset it had sold and immediately reacquired the asset at market value at that time and, solely for the purpose of determining when such tax is due and payable, as if any tax charged in respect of a chargeable gain that accrued from such a sale and reacquisition were tax for the accounting period of the chargeable company in which it ceases to be a member of the group.<\/p>\n<p>(5)Where any of the corporation tax assessed on a company in consequence of this section is not paid within 6 months from the date when it becomes payable, then &#8211;<\/p>\n<p>(a)a company which on that date, or immediately after the chargeable company ceased to be a member of the group, was the principal company of the group, and<\/p>\n<p>(b)a company which owned the asset on that date or when the chargeable company ceased to a member of the group,<\/p>\n<p>may, at any time within 2 years from the time when the tax became payable, be assessed and charged (in the name of the chargeable company) to all or any part of that tax, and a company paying any amount of tax under this subsection shall be entitled to recover a sum of that amount from the chargeable company.<\/p>\n<p>(6)Notwithstanding any limitation on the time for making assessments, an assessment to corporation tax chargeable in consequence of this section may be made at any time within 10 years from the time when the chargeable company ceased to be a member of the group, and where under this section the chargeable company is to be treated as having disposed of and reacquired an asset, all such recomputations of liability in respect of other disposals, and all such adjustments of tax, whether by means of assessment or by means of discharge or repayment of tax, as may be required in consequence of this section shall be made.<\/p>\n<p>(7)For the purposes of this section, a \u2018group of companies\u2019 shall include only companies which, by virtue of the law of a relevant Member State or other territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made, are resident for the purposes of tax in such Member State or territory, as the case may be, and for this purpose \u2018tax\u2019, in relation to a relevant Member State or such territory, other than the State, means any tax imposed in the Member State or territory which corresponds to corporation tax in the State.<\/p>\n<p>623A.<\/p>\n<h4>Transitional provisions in respect of section 623.<\/h4>\n<p>(1)In this section &#8216;the new definition&#8217; means section 616 as amended by section 56 of the Finance Act, 1999, and &#8216;the old definition&#8217; means that section as it had effect on the 10th day of February, 1999.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)on the 11th day of February, 1999, a company ceases, for the purposes of section 616 and the provisions of this Part subsequent to that section, to be a member of a group by reason only of the substitution for the old definition of the new definition, and<\/p>\n<p>(b)in consequence of ceasing to be such a member the company would, apart from this section, be treated by virtue of section 623(4) as selling an asset at any time,<\/p>\n<p>the company shall not be treated as selling the asset at that time unless the conditions in subsection (3) become satisfied, assuming for that purpose that the old definition applies.<\/p>\n<p>(3)The conditions referred to in subsection (2) are &#8211;<\/p>\n<p>(a)that for the purposes of section 623, the company ceases at any time (in this subsection referred to as the &#8216;relevant time\u2019) to be a member of the group referred to in subsection (2)(a),<\/p>\n<p>(b)that, at the relevant time, the company (or an associated company also ceasing to be a member of that group at that time) owns, otherwise than as trading stock, the asset, or property on the acquisition of which a chargeable gain in relation to the asset has been deferred on a replacement of business assets, and<\/p>\n<p>(c)that the time of acquisition of the asset referred to in section 623(2) fell within the period of 10 years ending with the relevant time.<\/p>\n<p>624.<\/p>\n<h4>Exemption from charge under section 623 in case of certain mergers.<\/h4>\n<p>(1)Section 623 shall not apply in a case where &#8211;<\/p>\n<p>(a)as part of a merger a company (in this section referred to as &#8220;company A&#8221;) ceases to be a member of a group of companies (in this section referred to as &#8220;the A group&#8221;), and<\/p>\n<p>(b)it is shown that the merger was carried out for bona fide commercial reasons and that the avoidance of liability to tax was not the main or one of the main purposes of the merger.<\/p>\n<p>(2)In this section, &#8220;merger&#8221; means an arrangement (including a series of arrangements) &#8211;<\/p>\n<p>(a)whereby one or more companies (in this section referred to as &#8220;the acquiring company&#8221; or, as the case may be, &#8220;the acquiring companies&#8221;) none of which is a member of the A group acquires or acquire, otherwise than with a view to their disposal, one or more interests in the whole or part of the business which, before the arrangement took effect, was carried on by company A,<\/p>\n<p>(b)whereby one or more members of the A group acquires or acquire, otherwise than with a view to their disposal, one or more interests in the whole or part of the business or each of the businesses which, before the arrangement took effect, was carried on either by the acquiring company or acquiring companies or by a company at least 90 per cent of the ordinary share capital of which was then beneficially owned by 2 or more of the acquiring companies, and<\/p>\n<p>(c)in respect of which the conditions in subsection (4) are fulfilled.<\/p>\n<p>(3)For the purposes of subsection (2), a member of a group of companies shall be treated as carrying on as one business the activities of that group.<\/p>\n<p>(4)The conditions referred to in subsection (2)(c) are &#8211;<\/p>\n<p>(a)that not less than 25 per cent by value of each of the interests acquired as mentioned in paragraphs (a) and (b) of subsection (2) consists of a holding of ordinary share capital, and the remainder of the interest or, as the case may be, of each of the interests acquired as mentioned in paragraph (b) of that subsection consists of a holding of share capital (of any description) or debentures or both,<\/p>\n<p>(b)that the value or, as the case may be, the aggregate value of the interest or interests acquired as mentioned in subsection (2)(a) is substantially the same as the value or, as the case may be, the aggregate value of the interest or interests acquired as mentioned in subsection (2)(b), and<\/p>\n<p>(c)that the consideration for the acquisition of the interest or interests acquired by the acquiring company or acquiring companies as mentioned in subsection (2)(a), disregarding any part of that consideration which is small by comparison with the total, either consists of, or is applied in the acquisition of, or consists partly of and as to the balance is applied in the acquisition of, the interest or interests acquired by members of the A group as mentioned in subsection (2)(b),<\/p>\n<p>and for the purposes of this subsection the value of an interest shall be determined as at the date of its acquisition.<\/p>\n<p>(5)Notwithstanding section 616(1)(a), references in this section to a company shall include references to a company which is not resident in a relevant Member State.<\/p>\n<p>625.<\/p>\n<h4>Shares in subsidiary member of group.<\/h4>\n<p>(1)<\/p>\n<p>(a)This section shall apply if a company (in this section referred to as &#8220;the subsidiary&#8221;) ceases to be a member of a group of companies, and on an earlier occasion shares in the subsidiary were disposed of by another company (in this section referred to as &#8220;the chargeable company&#8221;) which was then a member of that group in the course of an amalgamation or reconstruction in the group, but only if that earlier occasion fell within the period of 10 years ending on the date on which the subsidiary ceases to be a member of the group.<\/p>\n<p>(b)References in this section to a company ceasing to be a member of a group of companies shall not apply to cases where a company ceases to be a member of a group by being wound up or dissolved or in consequence of another member of the group being wound up or dissolved.<\/p>\n<p>(2)The chargeable company shall be treated for the purposes of the Capital Gains Tax Acts as if immediately before the earlier occasion it had sold and immediately reacquired the shares referred to in subsection (1)(a) at market value at that time.<\/p>\n<p>(3)Where before the subsidiary ceases to be a member of the group the chargeable company has ceased to exist, or a resolution has been passed, or an order made, for the winding up of the company, or any other act has been done for the like purpose, any corporation tax to which, if the chargeable company had continued in existence, it would have been chargeable in consequence of this section may be assessed and charged (in the name of the chargeable company) on the company which is, at the time when the subsidiary ceases to be a member of the group, the principal company of the group.<\/p>\n<p>(4)Where any of the corporation tax assessed on a company in consequence of this section, or in pursuance of subsection (3), is not paid within 6 months from the date when it becomes payable, then &#8211;<\/p>\n<p>(a)a company which is on that date, or was on the earlier occasion, the principal company of the group, and<\/p>\n<p>(b)any company taking an interest in the subsidiary as part of the amalgamation or reconstruction in the group, may at any time within 2 years from the time when the tax became payable, be assessed and charged (in the name of the chargeable company) to all or any part of that tax, and a company paying any amount of tax under this subsection shall be entitled to recover a sum of that amount from the chargeable company or, as the case may be, from the company assessed under subsection (3).<\/p>\n<p>(5)Notwithstanding any limitation on the time for making assessments, an assessment to corporation tax chargeable in consequence of this section may be made at any time within 10 years from the time when the subsidiary ceased to be a member of the group and, in relation to any disposal of the property after the earlier occasion, there shall be made all such adjustments of tax, whether by means of assessment or by means of discharge or repayment of tax, as may be required in consequence of this section.<\/p>\n<p>(6)For the purposes of this section, there shall be a disposal of shares in the course of an amalgamation or reconstruction in a group of companies if &#8211;<\/p>\n<p>(a)section 586 or 587 applies to shares in a company so as to equate them with shares in or debentures of another company, and<\/p>\n<p>(b)the companies are members of the same group, or become members of the same group as a result of the amalgamation or reconstruction.<\/p>\n<p>(7)Where by virtue of section 587 shares are to be treated as cancelled o r extinguished as a result of a merger or division within the meaning of section 638A (inserted by the Finance Act 2017) and replaced by a new issue, references in this section to a disposal of shares include references to the occasion of the shares being so treated.<\/p>\n<p>625A.<\/p>\n<h4>Transitional provisions in respect of section 625.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;the subsidiary&#8217; and &#8216;the chargeable company&#8217; have the same meanings, respectively, assigned to them by 625(1);<\/p>\n<p>&#8216;the new definition&#8217; means section 616 as amended by section 56 of the Finance Act, 1999, and &#8216;the old definition&#8217; means that section as it had effect on the 10th day of February, 1999.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)on the 11th day of February, 1999, the subsidiary company ceases, for the purposes of section 616 and the provisions of this Part subsequent to that section, to be a member of a group by reason only of the substitution for the old definition of the new definition, and<\/p>\n<p>(b)in consequence of ceasing to be such a member the chargeable company would, apart from this section, be treated by virtue of section 625(2) as selling shares in the subsidiary at any time,<\/p>\n<p>the chargeable company shall not be treated as selling the shares at that time unless the conditions in subsection (3) become satisfied assuming for that purpose that the old definition applies.<\/p>\n<p>(3)The conditions referred to in subsection (2) are &#8211;<\/p>\n<p>(a)that for the purposes of section 625 the subsidiary ceases at any time (in this subsection referred to as &#8216;the relevant time&#8217;) to be a member of the group referred to in subsection (2)(a), and<\/p>\n<p>(b)that the time of the earlier occasion referred to in section 625(1)(a) fell within the period of 10 years ending with the relevant time.<\/p>\n<p>626.<\/p>\n<h4>Tax on company recoverable from other members of group.<\/h4>\n<p>(1)Where at any time a chargeable gain accrues to a company which at that time is a member of a group of companies and any of the corporation tax assessed on the company for the accounting period in which the chargeable gain accrues is not paid within 6 months from the date when it becomes payable by the company, then, if the tax so assessed included any amount in respect of chargeable gains &#8211;<\/p>\n<p>(a)a company which at the time when the gain accrued was the principal company of the group, and<\/p>\n<p>(b)any other company which in any part of the period of 2 years ending with that time was a member of that group of companies and owned the asset disposed of or any part of it or, where the asset is an interest or right in or over another asset, owned either asset or any part of either asset,<\/p>\n<p>may at any time within 2 years from the time when the tax became payable be assessed and charged (in the name of the company to whom the chargeable gain accrued) to an amount of that corporation tax not exceeding corporation tax on the amount and at the rate charged in respect of that gain in the assessment on the company to which the chargeable gain accrued.<\/p>\n<p>(2)A company paying any amount of tax under subsection (1) shall be entitled to recover a sum of that amount &#8211;<\/p>\n<p>(a)from the company to which the chargeable gain accrued, or<\/p>\n<p>(b)if that company is not the company which was the principal company of the group at the time when the chargeable gain accrued, from that principal company,<\/p>\n<p>and a company paying any amount under paragraph (b) shall be entitled to recover a sum of that amount from the company to which the chargeable gain accrued and, in so far as it is not so recovered, to recover from any company which is for the time being a member of the group and which has while a member of the group owned the asset disposed of or any part of that asset (or, where that asset is an interest or right in or over another asset, owned either asset or any part of either asset) such proportion of the amount unrecovered as is just having regard to the value of the asset at the time when the asset, or an interest or right in or over that asset, was disposed of by that company.<\/p>\n<p>626A.<\/p>\n<h4>Restriction on set-off of pre-entry losses.<\/h4>\n<p>For the purposes of Part 20, Schedule 18A (which makes provision in relation to losses accruing to a company before the time when it becomes a member of a group of companies and losses accruing on assets held by any company at such a time) shall apply.<\/p>\n<p>626B.<\/p>\n<h4>Exemption from tax in the case of gains on certain disposals of shares.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section, section 626C and Schedule 25A &#8211;<\/p>\n<p>&#8220;investor company&#8221; and &#8220;investee company&#8221; have the meanings assigned by subsection (2);<\/p>\n<p>&#8220;relevant territory&#8221; means &#8211;<br \/>\n(i)a Member State of the European Communities<br \/>\n(ii)not being such a Member State, a territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made, or<br \/>\n(iii)not being a territory referred to in subparagraph (i) or (ii), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;<\/p>\n<p>&#8220;tax&#8221; in relation to a relevant territory other than the State means any tax imposed in that territory which corresponds to income tax or corporation tax in the State;<\/p>\n<p>&#8220;2 year period&#8221; means a period ending on the day before the second anniversary of the day on which the period began.<\/p>\n<p>(b)For the purposes of this section, section 626C and Schedule 25A &#8211;<\/p>\n<p>(i)a company shall only be a parent company in relation to another company at any time if that time falls within an uninterrupted period of not less than 12 months throughout which it directly or indirectly holds shares in that company by virtue of which &#8211;<\/p>\n<p>(I)it holds not less than 5 per cent of the company&#8217;s ordinary share capital,<\/p>\n<p>(II)it is beneficially entitled to not less than 5 per cent of the profits available for distribution to equity holders of the company, and<\/p>\n<p>(III)it would be beneficially entitled on a winding up to not less than 5 per cent of the assets of the company available for distribution to equity holders,<\/p>\n<p>and for the purposes of this subparagraph &#8211;<\/p>\n<p>(A)subsections (2) to (10) of section 9 shall apply with any necessary modifications, and<\/p>\n<p>(B)sections 413 to 419 shall apply as they apply for the purposes of Chapter 5 of Part 12 but as if &#8216;in a relevant territory&#8217; were substituted for &#8216;in the State&#8217; in subparagraph (iii) of section 413(3)(a) and as if paragraph (c) of section 411(1), other than that paragraph as it applies by virtue of clauses (I) and (II) of subparagraph (i), were disregarded,<\/p>\n<p>(ii)in determining whether the conditions in paragraph (a) of subsection (2) are satisfied, a company that is a member of a group shall be treated as holding so much of any shares held by any other company in the group and as having so much of the entitlement of any such company to any rights enjoyed by virtue of holding shares &#8211;<\/p>\n<p>(I)as the company would not, apart from this paragraph, hold or have, and<\/p>\n<p>(II)as are not part of a life business fund within the meaning of section 719,<\/p>\n<p>and, for the purposes of this subparagraph, &#8216;group&#8217; means a company which has one or more 51 per cent subsidiaries together with those subsidiaries,<\/p>\n<p>(iii)in determining whether the treatment provided for in subsection (2) applies, the question of whether there is a disposal shall be determined without regard to section 584 or that section as applied by any other section: and, to the extent to which an exemption under subsection (2) does apply in relation to a disposal, section 584 shall not apply in relation to the disposal,<\/p>\n<p>(iv)where assets of a company are vested in a liquidator under section 614 of the Companies Act 2014 or otherwise, the assets shall be deemed to be vested in, and the acts of liquidation in relation to the assets shall be deemed to be the acts of, the company (and acquisitions from, and disposals to, the liquidator shall be disregarded accordingly),<\/p>\n<p>(v)section 616 shall not apply.<\/p>\n<p>(2)A gain accruing to a company (in this section referred to as the &#8216;investor company&#8217;) on a disposal of shares in another company (in this section referred to as the &#8216;investee company&#8217;) is not a chargeable gain if &#8211;<\/p>\n<p>(a)the disposal by the investor company is at a time &#8211;<\/p>\n<p>(i)when the investor company is a parent company of the investee company, or<\/p>\n<p>(ii)within the 2 year period beginning on the most recent day on which the investor company was a parent company of the investee company,<\/p>\n<p>(b)the investee company is, by virtue of the law of a relevant territory, resident for the purposes of tax in the relevant territory at the time of the disposal, and<\/p>\n<p>(c)at the time of the disposal &#8211;<\/p>\n<p>(i)the investee company is a company whose business consists wholly or mainly of the carrying on of a trade or trades, or<\/p>\n<p>(ii)the business of &#8211;<\/p>\n<p>(I)the investor company,<\/p>\n<p>(II)each company of which the investor company is the parent company, and<\/p>\n<p>(III)the investee company, if it is not a company referred to in clause (II), and any company of which the investee company is the parent company,<\/p>\n<p>taken together consists wholly or mainly of the carrying on of a trade or trades.<\/p>\n<p>(3)The treatment of a gain, as not being a chargeable gain, provided by this section and section 626C shall not apply &#8211;<\/p>\n<p>(a)to a disposal that by virtue of any provision relating to chargeable gains is deemed to be for a consideration such that no gain or loss accrues to the person making the disposal,<\/p>\n<p>(b)to a disposal a gain on which would, by virtue of any provision other than this section or section 626C, not be a chargeable gain,<\/p>\n<p>(c)to disposals, including deemed disposals, of shares which are part of a life business fund within the meaning of section 719,<\/p>\n<p>(d)to a disposal of shares deriving their value or the greater part of this value directly or indirectly from assets specified in paragraphs (a) and (b) of subsection (3) of section 29 and subsection (6) of that section,<\/p>\n<p>(e)to deemed disposals under section 627.<\/p>\n<p>(3A)<\/p>\n<p>(a)In this subsection &#8216;relevant treatment of a gain&#8217; means the treatment, provided by this section or section 626C, of a gain as not being a chargeable gain.<\/p>\n<p>(b)Notwithstanding any provision of section 590, the relevant treatment of a gain shall not apply for the purposes of section 590, but this is subject to paragraph (c).<\/p>\n<p>(c)The relevant treatment of a gain shall apply for the purposes of section 590 where the participator (within the meaning of that section) is a company.<\/p>\n<p>(3B)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>\u2018arrangement\u2019 includes any agreement, understanding, scheme, transaction or series of transactions;<\/p>\n<p>\u2018relevant assets\u2019 means the assets specified in subsection (3)(d).<\/p>\n<p>(b)In calculating the portion of the value of shares attributable directly or indirectly to relevant assets, account shall not be taken of any arrangement that &#8211;<\/p>\n<p>(i)involves a transfer of money or other assets (apart from relevant assets) from a person connected with the company in which those shares are held,<\/p>\n<p>(ii)is made before a disposal of relevant assets, and<\/p>\n<p>(iii)the main purpose or one of the main purposes of which is the avoidance of tax.<\/p>\n<p>(4)Schedule 25A shall have effect for the purposes of supplementing this section and section 626C.<\/p>\n<p>626C.<\/p>\n<h4>Treatment of assets related to shares.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>(a)an asset is related to shares in a company if it is &#8211;<\/p>\n<p>(i)an option to acquire or dispose of shares in that company,<\/p>\n<p>(ii)a security to which are attached rights by virtue of which the holder is or may become entitled, whether by conversion or exchange or otherwise, to acquire or dispose of &#8211;<\/p>\n<p>(I)shares in that company,<\/p>\n<p>(II)an option to acquire or dispose of shares in that company, or<\/p>\n<p>(III)another security falling within this paragraph,<\/p>\n<p>or<\/p>\n<p>(iii)an option to acquire or dispose of any security within subparagraph (ii) or an interest in any such security,<\/p>\n<p>(b)in determining whether a security is within paragraph (a)(ii), no account shall be taken &#8211;<\/p>\n<p>(i)of any rights attached to the security other than rights relating, directly or indirectly, to shares of the company in question, or<\/p>\n<p>(ii)of rights as regards which, at the time the security came into existence, there was no more than a negligible likelihood that they would in due course be exercised to a significant extent.<\/p>\n<p>(2)A gain accruing to a company (in this subsection referred to as the &#8216;first-mentioned company&#8217;) on the disposal of an asset related to shares in another company is not a chargeable gain if &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)immediately before the disposal the first-mentioned company holds shares in the other company, and<\/p>\n<p>(ii)any gain accruing to the first-mentioned company on a disposal at that time of the shares would, by virtue of section 626B, not be a chargeable gain,<\/p>\n<p>or<\/p>\n<p>(b)<\/p>\n<p>(i)immediately before the disposal the first-mentioned company does not hold shares in the other company but is a member of a group and another member of that group does hold shares in the other company, and<\/p>\n<p>(ii)if the first-mentioned company, rather than the other member of the group, held the shares, any gain accruing to the first-mentioned company on a disposal at that time of the shares would, by virtue of section 626B, not be a chargeable gain;<\/p>\n<p>and for the purposes of this paragraph &#8216;group&#8217; means a company which has one or more 51 per cent subsidiaries together with those subsidiaries.<\/p>\n<p>&nbsp;<\/p>\n<p>Part 21 Provisions Relating to Mergers, Divisions and Transfers of Assets (ss. 630-638A)<\/p>\n<p>Chapter 1<\/p>\n<h4>Mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (ss. 630-638)<\/h4>\n<p>630. Interpretation (Part 21).<br \/>\nIn this Chapter &#8211;<\/p>\n<p>&#8220;bilateral agreement&#8221; means arrangements having the force of law by virtue of section 826(1);<\/p>\n<p>&#8220;company&#8221; means a company from a Member State;<\/p>\n<p>&#8220;company from a Member State&#8221; has the meaning assigned to it by Article 3 of the Directive;<\/p>\n<p>&#8220;the Directive&#8221; means Council Directive 2009\/133\/EC of 19 October 2009 [OJ No. L310, 25.11.2009, p.34], as amended, on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States;<\/p>\n<p>&#8220;Member State&#8221; means a Member State of the European Communities;<\/p>\n<p>&#8220;receiving company&#8221; means the company to which the whole or part of a trade is transferred in the course of a transfer;<\/p>\n<p>&#8220;SE Regulation&#8221; means Council Regulation (EC) No. 2157\/2001 of 8 October 2001, on the Statute for a European Company (SE) [OJ No. L294, 10.11.2001, p.1];<\/p>\n<p>&#8220;SCE Regulation&#8221; means Council Regulation (EC) No. 1435\/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) [OJ No. L207, 18.8.2003, p.1];<\/p>\n<p>&#8220;securities&#8221; means shares and debentures;<\/p>\n<p>&#8220;shares&#8221; includes stock;<\/p>\n<p>&#8220;transfer&#8221; means the transfer by a company (other than a transfer referred to in section 633D) of the whole or part of its trade in the circumstances set out in section 631(1) or 634(2), as the case may be;<\/p>\n<p>&#8220;transferring company&#8221; means the company by which the whole or part of a trade is transferred in the course of a transfer.<\/p>\n<p>631.<\/p>\n<h4>Transfer of assets generally.<\/h4>\n<p>(1)<\/p>\n<p>(a)This section shall apply where a company transfers the whole of a trade carried on by it in the State to another company and the consideration for the transfer consists solely of the issue to the transferring company of securities (in this section referred to as &#8220;the new assets&#8221;) in the receiving company.<\/p>\n<p>(b)A company which transfers part of a trade to another company shall be treated for the purposes of this section as having carried on that part of its trade as a separate trade.<\/p>\n<p>(2)<\/p>\n<p>(a)The transfer shall not be treated as giving rise to any allowance or charge provided for by section 307 or 308.<\/p>\n<p>(b)There shall be made to or on the receiving company in accordance with sections 307 and 308 all such allowances and charges as would, if the transferring company had continued to carry on the trade and had continued to use the transferred assets for the purposes of the trade, have been made to or on the transferring company in respect of any assets transferred in the course of the transfer, and the amount of any such allowance or charge shall be computed as if the receiving company had been carrying on the trade since the transferring company began to do so and as if everything done to or by the transferring company had been done to or by the receiving company.<\/p>\n<p>(c)This subsection shall not apply as respects assets transferred in the course of a transfer if in consequence of the transfer, or a transaction of which the transfer is a part, the Corporation Tax Acts are to apply subject to subsections (6) to (9) of section 400.<\/p>\n<p>(3)For the purposes of the Capital Gains Tax Acts and, in so far as they apply to chargeable gains, the Corporation Tax Acts &#8211;<\/p>\n<p>(a)the transfer shall not be treated as involving any disposal by the transferring company, and<\/p>\n<p>(b)the receiving company shall be treated as if the assets transferred to it in the course of the transfer were acquired by it at the same time and for the same consideration at which they were acquired by the transferring company and as if all things done by the transferring company relating to the assets transferred in the course of the transfer had been done by the receiving company.<\/p>\n<p>(4)Where, at any time within a period of 6 years commencing on the day on which the assets were transferred in the course of the transfer, the transferring company disposes of the new assets then, for the purposes of the Capital Gains Tax Acts and, in so far as they apply to chargeable gains, the Corporation Tax Acts, in computing any chargeable gain on the disposal of any new assets &#8211;<\/p>\n<p>(a)the aggregate of the chargeable gains less allowable losses which but for subsection (3)(a) would have been chargeable on the transferring company shall be apportioned between the new assets as a whole, and<\/p>\n<p>(b)the sums allowable as a deduction under section 552(1)(a) shall be reduced by the amount apportioned to the new asset under paragraph (a),<\/p>\n<p>and, if the securities which comprise the new assets are not all of the same type, the apportionment between the securities under paragraph (a) shall be in accordance with their market value at the time they were acquired by the transferring company.<\/p>\n<p>(5)Subsections (2) to (4) shall not apply if &#8211;<\/p>\n<p>(a)immediately after the time of the transfer &#8211;<\/p>\n<p>(i)the assets transferred in the course of the transfer are not used for the purposes of a trade carried on by the receiving company in the State,<\/p>\n<p>(ii)the receiving company would not be chargeable to corporation tax or capital gains tax in respect of any chargeable gains accruing to it on a disposal, if it were to make such a disposal, of any assets (other than cash) acquired in the course of the transfer, or<\/p>\n<p>(iii)any of the assets are assets in respect of which, by virtue of being of a description specified in a bilateral agreement, the receiving company is to be regarded as not liable in the State to corporation tax or capital gains tax on gains accruing to it on a disposal,<\/p>\n<p>or<\/p>\n<p>(b)the transferring company and the receiving company jointly so elect by notice in writing to the inspector, and such notice shall be made by the time by which a return is to be made by the transferring company under Chapter 3 of Part 41A for the accounting period in which the transfer takes place.<\/p>\n<p>632.<\/p>\n<h4>Transfer of assets by company to its parent company.<\/h4>\n<p>(1)Where a company disposes of an asset used for the purposes of a trade carried on by it in the State to another company which holds all of the securities representing the company&#8217;s capital and but for this section the companies would not be treated in accordance with section 617 in respect of the asset, then, if &#8211;<\/p>\n<p>(a)immediately after the disposal the company acquiring the asset commences to use the asset for the purposes of a trade carried on by it in the State, and<\/p>\n<p>(b)the disposal is not, or does not form part of, a transfer to which section 631 applies,<\/p>\n<p>sections 617 to 619 shall apply as if the companies were resident in the State.<\/p>\n<p>(2)Subsection (5) of section 631 shall apply with any necessary modification for the purposes of this section as if references in that subsection to subsections (2) to (4) of that section were references to subsection (1) of this section.<\/p>\n<p>633.<\/p>\n<h4>Company reconstruction or amalgamation: transfer of development land.<\/h4>\n<p>Where a company, for the purposes of or in connection with a scheme of reconstruction or amalgamation (within the meaning of section 615), disposes of an asset which consists of development land (within the meaning of section 648) to another company and &#8211;<\/p>\n<p>(a)the disposal is not made in the course of a transfer to which section 631 applies, and<\/p>\n<p>(b)the company disposing of the asset and the company acquiring the asset would, if &#8211;<\/p>\n<p>(i)the definition of &#8220;chargeable gains&#8221; in section 78(4), and<\/p>\n<p>(ii)section 649(1),<\/p>\n<p>were deleted, be treated in accordance with section 615(2) in respect of that asset,<\/p>\n<p>then, the companies shall be treated for the purposes of the Capital Gains Tax Acts as if the asset was acquired by the one company from the other company for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company making the disposal, and for the purposes of section 556 the acquiring company shall be treated as if the acquisition of the asset by the other company had been the acquiring company&#8217;s acquisition of the asset.<\/p>\n<p>633A.<\/p>\n<h4>Formation of SE or SCE by merger &#8211; leaving assets in the State.<\/h4>\n<p>(1)For the purposes of this section an asset is a qualifying transferred asset if &#8211;<\/p>\n<p>(a)the asset is transferred to an SE or an SCE as part of the process of the merger forming it,<\/p>\n<p>(b)<\/p>\n<p>(i)the transferor in relation to the asset is resident in the State at the time of the transfer, or<\/p>\n<p>(ii)any gain that would have accrued to the transferor in respect of the asset, had it disposed of the asset immediately before the time of the transfer, would have been a chargeable gain,<\/p>\n<p>and<\/p>\n<p>(c)<\/p>\n<p>(i)the transferee SE or SCE in relation to the asset is resident in the State on formation, or<\/p>\n<p>(ii)any gain that would have accrued to the transferee SE or SCE in respect of the asset, if it disposed of the asset immediately after the transfer, would be a chargeable gain.<\/p>\n<p>(2)For the purposes of this section and section 633B, a company is treated as resident for the purposes of tax in a Member State (other than the State) if &#8211;<\/p>\n<p>(a)it is so treated by virtue of the law of the Member State, and<\/p>\n<p>(b)it is not treated, for the purposes of double taxation relief arrangements to which the Member State is a party, as resident for the purposes of tax in a territory which is not a Member State, and for this purpose &#8220;tax&#8221;, in relation to a Member State other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.<\/p>\n<p>(3)This section applies where &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)an SE is formed by the merger of 2 or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of the SE Regulation, or<\/p>\n<p>(ii)an SCE is formed by a merger in accordance with Article 2 of the SCE Regulation,<\/p>\n<p>(b)each merging company is resident for the purposes of tax in a Member State,<\/p>\n<p>(c)the merging companies are not all resident for the purposes of tax in the same Member State, and<\/p>\n<p>(d)section 615 does not apply to any qualifying transferred assets.<\/p>\n<p>(4)Where this section applies, qualifying transferred assets shall be treated for the purpose of the Capital Gains Tax Acts and, in so far as they apply to chargeable gains, the Corporation Tax Acts as if acquired by the SE, or as the case may be the SCE, for a consideration resulting in neither gain or loss for the transferor.<\/p>\n<p>(5)Where this section applies &#8211;<\/p>\n<p>(a)the transfer of assets in the course of the merger shall be treated as not giving rise to any allowance or charge provided for by section 307 or 308,<\/p>\n<p>(b)there shall be made to or on the SE or (as the case may be) the SCE in accordance with sections 307 and 308 all such allowances and charges as would, if the transferring company had continued to use the transferred assets for the purposes of its trade, have been made to or on the transferring company in respect of any assets transferred in the course of the merger, and the amount of any such allowance or charge shall be computed as if the SE or (as the case may be) the SCE had been carrying on the trade carried on by the transferring company since the transferring company began to do so and as if everything done to or by the transferring company had been done to or by the SE or (as the case may be) the SCE.<\/p>\n<p>633B.<\/p>\n<h4>Formation of SE or SCE by merger &#8211; not leaving assets in the State.<\/h4>\n<p>(1)This section applies where &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)an SE is formed by the merger of 2 or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of the SE Regulation, or<\/p>\n<p>(ii)an SCE is formed by a merger in accordance with Article 2 of the SCE Regulation,<\/p>\n<p>(b)each merging company is resident for the purposes of tax in a Member State,<\/p>\n<p>(c)the merging companies are not all resident for the purposes of tax in the same Member State,<\/p>\n<p>(d)in the course of the merger a company resident in the State transfers to a company resident in a Member State other than the State all assets and liabilities of a trade which the company resident in the State carried on in a Member State (other than the State) through a branch or agency, and<\/p>\n<p>(e)the aggregate of the chargeable gains accruing to the company resident in the State on the transfer exceeds the aggregate of any allowable losses so accruing.<\/p>\n<p>(2)Where this section applies, for the purposes of the Capital Gains Tax Acts and, in so far as they apply to chargeable gains the Corporation Tax Acts &#8211;<\/p>\n<p>(a)the allowable losses accruing to the company resident in the State on the transfer shall be set off against the chargeable gains so accruing, and<\/p>\n<p>(b)the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses.<\/p>\n<p>(3)Where this section applies, section 634 shall also apply.<\/p>\n<p>633C.<\/p>\n<h4>Treatment of securities on a merger.<\/h4>\n<p>(1)This section applies where &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)an SE is formed by the merger of 2 or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of the SE Regulation, or<\/p>\n<p>(ii)an SCE is formed by a merger in accordance with Article 2 of the SCE Regulation,<\/p>\n<p>(b)each merging company is resident for the purposes of tax in a Member State,<\/p>\n<p>(c)the merging companies are not all resident for the purposes of tax in the same Member State, and<\/p>\n<p>(d)the merger does not constitute or form part of a scheme of reconstruction or amalgamation within the meaning of section 587.<\/p>\n<p>(2)Where this section applies, the merger shall be treated for the purposes of section 587 as if it were a scheme of reconstruction.<\/p>\n<p>633D. Mergers where a company is dissolved without going into liquidation.<br \/>\nThe transfer of all the assets and liabilities of a company which is a wholly owned subsidiary of another company (in this section referred to as the &#8220;parent company&#8221;) to the parent company, on that subsidiary company being dissolved without going into liquidation, shall not be treated as involving a disposal by the parent company of the share capital which it held in the subsidiary company immediately before the dissolution.<\/p>\n<p>634.<\/p>\n<h4>Credit for tax.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;law of the Member State which has the effect of deferring a charge to tax on a gain&#8221; means any law of the Member State concerned which provides &#8211;<\/p>\n<p>(a)that the gain accruing to the transferring company on the disposal of the assets in the course of the transfer is to be treated as not accruing until the disposal of the assets by the receiving company,<\/p>\n<p>(b)that the receiving company is to be treated as having acquired the assets for a consideration of such amount as would secure that, for the purposes of charging the gain on the disposal to tax in that Member State, neither a gain nor a loss would accrue to the transferring company on the transfer and the receiving company is to be treated as if the acquisition of the assets by the transferring company had been the receiving company&#8217;s acquisition of the assets, or<\/p>\n<p>(c)such other deferral of a charge to tax as corresponds to paragraph (a) or (b);<\/p>\n<p>&#8220;relevant certificate given by the tax authorities of a Member State&#8221; means a certificate so given and which states &#8211;<\/p>\n<p>(a)whether gains accruing to the transferring company on the transfer would have been chargeable to tax under the law of the Member State but for &#8211;<\/p>\n<p>(i)the Directive, or<\/p>\n<p>(ii)any provision of the law of the Member State which has the effect of deferring a charge to tax on a gain in the case of such a transfer,<\/p>\n<p>(b)if those gains accruing would have been so chargeable, the amount of tax which would have been payable under that law if, in so far as is permitted under that law, any losses arising on the transfer are set against any gains so arising and any deductions and reliefs available to the transferring company under that law other than the provisions mentioned in paragraph (a) had been claimed.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)a company resident in the State transfers the whole or part of a trade which immediately before the time of the transfer it carried on in a Member State (other than the State) through a branch or agency to a company not resident in the State,<\/p>\n<p>(b)the transfer includes the whole of the assets of the transferring company used for the purposes of the trade or the part of the trade or the whole of those assets other than cash, and<\/p>\n<p>(c)the consideration for the transfer consists wholly or partly of the issue to the transferring company of securities in the receiving company,<\/p>\n<p>then, tax specified in a relevant certificate given by the tax authorities of the Member State in which the trade was so carried on shall be treated for the purposes of Chapter 1 of Part 35 as tax &#8211;<\/p>\n<p>(i)payable under the law of that Member State, and<\/p>\n<p>(ii)in respect of which credit may be allowed under a bilateral agreement.<\/p>\n<p>(3)<\/p>\n<p>(a)Where &#8211;<\/p>\n<p>(i)a company which is not resident in the State transfers the whole of a trade carried on by it, or a part of such a trade, to another company and the consideration for the transfer consists solely of the issue to the transferring company of securities in the receiving company, and<\/p>\n<p>(ii)for the purposes of computing the income or gains of any person (in this subsection referred to as the &#8220;relevant person&#8221;) who is chargeable to tax in the State, income or gains of the transferring company are treated as being income, or as the case may be chargeable gains, of the relevant person and as not being income or chargeable gains of the transferring company,<\/p>\n<p>then, in computing any liability to tax of the relevant person in respect of the transfer, an appropriate part of tax specified in a relevant certificate given by the tax authorities of the Member State in which the trade was so carried on shall be treated for the purposes of Chapter 1 of Part 35 as tax &#8211;<\/p>\n<p>(I)payable under the law of that Member State, and<\/p>\n<p>(II)in respect of which credit may be allowed under a bilateral agreement.<\/p>\n<p>(b)For the purposes of this subsection, the appropriate part of tax on income or gains specified in a certificate in relation to a relevant person shall be so much of that tax as bears to the amount of that tax the same proportion as the part of any income, or as the case may be gains, of the transferring company in respect of the transfer which is treated as income, or as the case may be gains, of the relevant person bears to the amount of that income, or as the case may be gains, of the transferring company.<\/p>\n<p>635.<\/p>\n<h4>Avoidance of tax.<\/h4>\n<p>Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, sections 631, 632, 633, 633A, 633C and 634 shall not apply as respects a transfer, disposal or the formation of an SE or an SCE by merger unless it is shown that the transfer, disposal or merger, as the case may be, is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is avoidance of liability to income tax, corporation tax or capital gains tax.<\/p>\n<p>636.<\/p>\n<h4>Returns.<\/h4>\n<p>(1)[deleted]<\/p>\n<p>(2)Where section 631, 632, 633, 633A, 633B, 633C or 634 applies in relation to a transfer or disposal, the transferring company shall make a return of the transfer or disposal, as the case may be, to the appropriate inspector in such form as the Revenue Commissioners may require.<\/p>\n<p>(3)Where corporation tax or capital gains tax payable by a company is to be reduced by virtue of section 634, a return under this section shall include a relevant certificate given by the tax authorities of the Member State in which the trade was carried on immediately before the time of the transfer.<\/p>\n<p>(4)A company shall make a return under this section within 9 months from the end of the accounting period in which the transfer occurs.<\/p>\n<p>637.<\/p>\n<h4>Other transactions.<\/h4>\n<p>(1)The Revenue Commissioners may, on an application being made to them in writing in respect of a transaction &#8211;<\/p>\n<p>(a)of a type specified in the Directive, and<\/p>\n<p>(b)to which this Chapter does not apply,<\/p>\n<p>give such relief as appears to them to be just and reasonable for the purposes of giving effect to the Directive.<\/p>\n<p>(2)An application under this section shall be made in such form as the Revenue Commissioners may require.<\/p>\n<p>638.<\/p>\n<h4>Apportionment of amounts.<\/h4>\n<p>(1)Where, in relation to an apportionment to be made for the purposes of this Chapter &#8211;<\/p>\n<p>(a)it appears, at the time of the apportionment, that it is material as respects the liability to tax (for whatever period) of 2 or more companies, and<\/p>\n<p>(b)it is not possible for a company making the apportionment and the appropriate inspector to agree on that apportionment,<\/p>\n<p>the inspector shall determine the apportionment and give notice in writing of the determination to each company affected by that apportionment.<\/p>\n<p>(2)A company aggrieved by a determination made under subsection (1) in respect of that company may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination, for their determination of a just and reasonable apportionment.<\/p>\n<p>Chapter 2 Mergers and divisions pursuant to Companies Act 2014 (s. 638A)<br \/>\n638A. Company mergers and divisions<br \/>\n(1)In this section &#8211;<\/p>\n<p>\u2018division\u2019 means a division undertaken in accordance with Chapter 4 of Part 9 or, as the case may be, Chapter 17 of Part 17 of the Companies Act 2014;<\/p>\n<p>\u2018merger\u2019 means a merger undertaken in accordance with Chapter 3 of Part 9 or, as the case may be, Chapter 16 of Part 17 of the Companies Act 2014;<\/p>\n<p>\u2018successor company\u2019 means a company to which assets and liabilities have been transferred from a transferor company as a result of a merger or division;<\/p>\n<p>\u2018the Acts\u2019 has the meaning assigned to it by section 1077A;<\/p>\n<p>\u2018transferor company\u2019 means a company from which assets and liabilities have been transferred to a successor company or successor companies as a result of a merger or division.<\/p>\n<p>(2)All liabilities and obligations of, and requirements or things to be fulfilled or done by, a transferor company under Part 38, 41A, 42 or 47, as the case may be, shall for the purposes of the Part concerned be treated as liabilities and obligations of, and requirements or things to be fulfilled or done by, the successor company or successor companies.<\/p>\n<p>(3)In relation to an appeal made under any provision of the Acts by a transferor company or to be made by a successor company, as the case may be, an appeal made by a transferor company shall be treated as an appeal made by the successor company for the purposes of Part 40 or 40A, as the case may be.<\/p>\n<p>(4)Any right of appeal in relation to an appealable matter (as defined in section 949A) conferred on a transferor company shall be treated as conferred on the successor company.<\/p>\n<p>&nbsp;<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10874\" data-postid=\"10874\" class=\"themify_builder_content themify_builder_content-10874 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Groups Capital gains tax reliefs exist to cater for the fact that businesses are often organised in groups of companies. \u00a0A group of companies under Company Law comprises a holding company and one or more layers of subsidiaries Companies are said to be in the same group when one is a parent or subsidiary of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[421],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10874"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10874"}],"version-history":[{"count":14,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10874\/revisions"}],"predecessor-version":[{"id":34513,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10874\/revisions\/34513"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}