Revenue has published a Tax Briefing article which describes the restriction on the allowance of capital losses introduced by section 59 Finance Act 2010, and sets out the scope of the provision and how Revenue envisages its application.

Section 59 Finance Act 2010 introduced section 546A into the Taxes Consolidation Act 1997. This section provides that a capital loss is denied, if it arises by virtue of arrangements and the main purpose, or one of the main purposes of the arrangements is to secure a tax advantage.

In Tax Briefing Issue 03 of 2011 Revenue confirm that it is their intention that capital losses will be unavailable where it is a reasonable inference from the facts that arrangements are in place with the primary intention of deriving a tax advantage. The types of such schemes which would fall into this category are outlined in the Tax Briefing.

A discussion of what is meant by the term “arrangement” and “tax advantage” together with examples illustrating the points are also set out in the Tax Briefing which is reproduced in full on here.