Taxes Consolidation Act, 1997 (Number 39 of 1997)
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506 Capital gains tax.
[FA84 s25]
(1) The sums allowable as deductions from the consideration in the computation for the purposes of capital gains tax of the gain or loss accruing to an individual on the disposal of shares in respect of which any relief has been given and not withdrawn shall be determined without regard to that relief, except that where those sums exceed the consideration they shall be reduced by an amount equal to the lesser of—
(a) the amount of that relief, and
(b) the excess;
but this subsection shall not apply to a disposal within [2]>section 1028(5)<[2][2]>section 1028(5) or 1031M(5)<[2].
(2) In relation to shares in respect of which relief has been given and not withdrawn, any question—
(a) as to which of any such shares issued to a person at different times a disposal relates, or
(b) whether a disposal relates to such shares or to other shares,
shall for the purposes of capital gains tax be determined as for the purposes of section 498.
(3) Where an individual holds ordinary shares in a company and the relief has been given in respect of some of the shares but not others, then, if there is a reorganisation (within the meaning of section 584) affecting those shares, section 584(3) shall apply separately to the shares in respect of which the relief has been given and to the other shares (so that the shares of each kind shall be treated as a separate holding of original shares and identified with a separate new holding).
(4) There shall be made all such adjustments of capital gains tax, whether by means of assessment or by means of discharge or repayment of tax, as may be required in consequence of the relief being given or withdrawn.
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506 Nominees and designated funds.
(1) Shares subscribed for, issued to, held by or disposed of for an individual by a nominee shall be treated for the purposes of this Part as subscribed for, issued to, held by or disposed of by that individual.
(2) (a) Relief shall be given, and section 490(1)(a) does not apply, in respect of an amount subscribed as nominee for an individual by a person or persons having the management of an investment fund designated by the Revenue Commissioners for the purposes of this section (in this Part referred to as the “managers of a designated fund”) where the amount so subscribed forms part of the fund.
(b) Except where provided by paragraph (a), relief shall not be given in respect of an amount subscribed as nominee for an individual by a person or persons having the management of an investment fund where the amount so subscribed forms part of the fund.
(3) The Revenue Commissioners may, if they think fit, having regard to the facts of the particular case and after such consultation, if any, as may seem to them to be necessary with such person or body of persons as in their opinion may be of assistance to them, and subject to such conditions, if any, as they think proper to attach to the designation, designate an investment fund for the purposes of this Part.
(4) (a) The Revenue Commissioners may, by notice in writing given to the managers of a designated investment fund, withdraw the designation given for the purposes of this section to the fund in accordance with subsection (3) and, on the giving of the notice, the fund ceases to be a designated fund as respects any subscriptions made after the date of the notice referred to in paragraph (b).
(b) Where the Revenue Commissioners withdraw the designation of any fund for the purposes of this section, notice of the withdrawal shall be published as soon as may be in Iris Oifigiúil.
(5) Where an individual claims relief in respect of eligible shares in a company which have been issued to the managers of a designated fund as nominee for the individual, then section 501(2) applies as if it required—
(a) the certificate referred to in that section to be issued by the company to the managers, and
(b) the claim for relief to be accompanied by a certificate issued by the managers, in such form as the Revenue Commissioners may authorise, furnishing such information as the Revenue Commissioners may require and certifying that the managers hold certificates issued to them by the companies concerned, for the purposes of section 501(2) in respect of the holdings of eligible shares shown on the managers’ certificate.
(6) The managers of a designated fund may be required by a notice given to them by an inspector or other officer of the Revenue Commissioners to deliver to the officer within the time limited by the notice a return of the holdings of eligible shares shown on certificates issued by them in accordance with subsection (5) in the year of assessment to which the return relates.
(7) Section 501(6) does not apply in relation to any certificate issued by the managers of a designated fund for the purposes of subsection (5).
(8) Without prejudice to the generality of subsection (3), the Revenue Commissioners shall designate a fund for the purposes of this Part only if they are satisfied that—
(a) the fund is established under irrevocable trusts for the sole purpose of enabling individuals who qualify for the relief (in this subsection referred to as “qualifying individuals”) to invest in eligible shares of a qualifying company, and
(b) under the terms of the trusts it is provided that—
(i) the entire fund is to be invested without undue delay in eligible shares,
(ii) the fund is to subscribe only for shares which, subject to the circumstances of the qualifying individuals participating in the fund (in this subsection referred to as “participants”), qualify those participants for relief,
(iii) pending investment in eligible shares, any moneys subscribed for the purchase of shares are to be placed on deposit in a separate account with a bank licensed to transact business in the State,
(iv) any amounts received by means of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund has been established, to be paid without undue delay to the participants,
(v) any charges to be made by means of management or other expenses in connection with the establishment, the running, the winding down or the termination of the fund shall be at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund is established,
(vi) audited accounts of the fund are submitted annually to the Revenue Commissioners as soon as may be after the end of each period for which accounts of the fund are made up,
(vii) the managers, the trustees of the fund and any of their associates are not for the time being connected either directly or indirectly with any company whose shares comprise part of the fund,
(viii) any discounts on eligible shares received by the trustees or managers of the fund are accepted solely for the benefit of the participants,
(ix) the fund is a closed fund and the closing date for participation precedes the making of the first investment,
(x) if a limit is placed on the size of the fund or a minimum amount for investment is stipulated, any subscriptions not accepted are to be returned without undue delay, and
(xi) no participant is allowed to have any shares in any company in which the fund has invested transferred into his or her name until 3 years have elapsed from the date of the issue of the shares to the fund.
(9) The Revenue Commissioners may nominate in writing an inspector or other officer to perform any acts and discharge any functions authorised by this Part to be performed or discharged by the Revenue Commissioners.
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506. Anti-avoidance: qualifying company (SURE)
(1) A company shall not be a qualifying company for the purposes of relief under this Chapter if, in the case of a company in which a relevant investment is made by a specified individual (being that individual’’s first such investment in that company), any transaction in the relevant period between the company and another company (being the immediate former employer of the individual), or a company which controls or is under the control of that other company, is otherwise than by means of a transaction at arm’’s length, or if——
(a) (i) an individual has acquired a controlling interest in the company’’s trade after 5 April 1984, and
(ii) at any time in the compliance period the individual has or has had a controlling interest in another trade,
and
(b) the trade carried on by the company or a substantial part of that trade——
(i) is concerned with the same or similar types of property or parts of property or provides the same or similar services or facilities as the other trade, or
(ii) serves substantially the same or similar outlets or markets as the other trade.
(2) For the purposes of this section, a person has a controlling interest in a trade——
(a) in the case of a trade carried on by a company, if——
(i) such person controls the company,
(ii) the company is a close company for the purposes of the Corporation Tax Acts and such person or an associate of such person is a director of the company and the beneficial owner of, or able directly or through the medium of other companies or by any other indirect means to control, more than 30 per cent of the ordinary share capital of the company, or
(iii) not less than 50 per cent of the trade could, in accordance with section 400(2), be regarded as belonging to such person,
or
(b) in any other case, if such person is entitled to not less than 50 per cent of the assets used for, or the income arising from, the trade.
(3) For the purposes of subsection (2), there shall be attributed to any person any rights or powers of any other person who is an associate of that person.
(4) In subsection (1), references to a company’’s trade include references to the trade of any of its subsidiaries.
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Substituted by FA11 s33(1)(a). Has effect in respect of shares issued on or after 25 November 2011. Note: FA 12 s26 (2) amends FA 11 s33 and provides: (b) This section does not have effect in respect of shares issued before 25 November 2011 and, for all the purposes of Part 16 in connection with those shares, the Principal Act has effect as if this section had not been enacted. (c) This section does not have effect in respect of shares issued on or after 25 November 2011 and on or before 31 December 2011 where— (i) the company issuing the shares, or (ii) where the shares are acquired by an investment fund, the fund acquiring the shares, elects by notice in writing to the Revenue Commissioners on or before 31 December 2011 that, for all the purposes of Part 16 in connection with those shares, the Principal Act has effect as if this section had not been enacted.