739W Transfer of IREF business to a REIT

(1) In this section—

“property rental business” has the meaning assigned to it by Part 25A;

“qualifying REIT” means a company which was not a REIT prior to giving the notice referred to in subsection (2)(a);

“REIT” has the meaning assigned to it in Part 25A;

“transferred business” means the IREF business, the IREF assets and any assets ancillary to the IREF business referred to in subsection (2) (b).

(2) This section applies—

(a) where notice is given to the Revenue Commissioners under section 705E specifying a date not later than 31 December 2017 in respect of a company which is to carry on the property rental business previously carried on as part of the IREF property business of an IREF,

(b)where that IREF transfers the whole of its property rental business to the qualifying REIT referred to in paragraph (a),

(c)(i) where ordinary shares in the qualifying REIT are issued to the unit holders in the IREF in respect of and in proportion to (or as nearly as may be in proportion to) their unit holdings in the IREF, and

(ii) where the IREF receives no part of the consideration for the transfer referred to in paragraph (b) (otherwise than by the qualifying REIT taking over the whole or part of the liabilities of the property rental business transferred),

(d)where the shares concerned are issued on or before 31 December 2017, and

(e)where the IREF does not carry on any business similar to the transferred business after the date of transfer referred to in paragraph (b).

(3)In respect of a transfer to which this section applies, for the purpose of the Capital Gains Tax Acts the unit holder shall not be treated as having disposed of the units or as having acquired the shares or any part of them, but the units (taken as a single asset) and the shares (taken as a single asset) shall be treated as the same asset acquired as the units were acquired.

(4)For the purposes of Part 25A and Chapters 1A and 1B of Part 27——

(a)the IREF shall be treated as having disposed of, and

(b)the qualifying REIT shall, notwithstanding section 705L(1), be treated as having acquired,

all assets and liabilities of the transferred business for consideration equal to the value of those assets and liabilities in the accounts of the investment undertaking.

(5)For the purposes of this Chapter, the transfer referred to in subsection (2) shall constitute an IREF taxable event but the IREF, the unit holder and the qualifying REIT may jointly elect that the tax due under sections 739O and 739P becomes due and payable on the earlier of——

(a)a date not later than 60 days after the disposal of the shares in the qualifying REIT,

(b)the tenth anniversary of the date of the transfer,

(c)the appointment of a liquidator to the qualifying REIT, or

(d)the company ceasing to be a REIT,

and the qualifying REIT shall, not later than 21 days after the date of the end of each of the calendar years which follow the year in which the transfer occurs, deliver a statement to the Revenue Commissioners, in the prescribed form, providing such information as may be required for the purposes of this subsection.

(6) Any instrument giving effect to a transfer to which this section applies shall not be chargeable to stamp duty under the Stamp Duties Consolidation Act 1999.