Revenue Note for Guidance
Where an IREF transfers some or all of its IREF business to a REIT, then the tax arising on the IREF taxable event can be deferred, subject to certain conditions, for a period of up to 10 years.
(1) ‘Property rental business’ is assigned the same meaning as in Part 25A, which deals with the taxation of REITs.
‘qualifying REIT’ means a new REIT, formed to take over the business of an IREF.
‘transferred business’ means the IREF business and associated assets transferred from the IREF to the REIT.
(2) This section applies:
(3) For the purposes of the CGT Acts, the unit holder’s acquisition of the units will be treated as the acquisition of the shares, for the purposes of determining base cost and acquisition date.
(4) For the purposes of the IREF, Investment Undertaking and REIT legislation, the IREF and the REIT shall be treated as having disposed of and acquired, as the case may be, the assets and liabilities of the property rental business for the value shown in the accounts of the IREF.
(5) The transfer of the assets from the IREF into the REIT will constitute an IREF taxable event but the resultant IREF withholding tax will be deferred until the earlier of:
Within 21 days of each anniversary of the transfer, the company must provide an annual statement to Revenue providing details relevant to the deferral of the IREF withholding tax.
(6) Instruments giving effect to a transfer under this section are not stampable.
Relevant Date: Finance Act 2019