Taxes Consolidation Act, 1997 (Number 39 of 1997)
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492 Certification in respect of an issue of eligible shares where aggregate of amounts raised by a company exceeds £250,000.
[FA84 s13B; FA96 s20; FA97 s146(1) and Sch9 par13(3)]
(1) (a) In this section, “relevant certificate” means a certificate from an authority (within the meaning of this section) given to a company in relation to a relevant issue, certifying, on the basis of a business plan of the company and any other information which the company supplies to the authority or which the authority may reasonably request the company to furnish to it, that, having regard to the amount of money raised or to be raised by the relevant issue, the authority is satisfied that—
(i) the purpose or purposes specified in section 489(1)(c)(i) for which the money raised or to be raised is intended to be used has or have the potential to create a reasonable level of additional sustainable employment in the company, or
(ii) the money raised or to be raised is necessary to secure the survival of the company and maintain a reasonable level of sustainable employment.
(b) In considering whether to give a relevant certificate to a company, an authority shall have regard only to such guidelines for that purpose as may from time to time be agreed—
(i) with the consent of the Minister for Finance, between the certifying agency and the Minister for Arts, Heritage, Gaeltacht and the Islands or the Minister for Enterprise, Trade and Employment or the Minister for the Marine and Natural Resources or the Minister for Tourism, Sport and Recreation (as may be appropriate in the circumstances), or
(ii) between the certifying Minister and the Minister for Finance,
and those guidelines may, without prejudice to the generality of the foregoing, include provision—
(I) for the submission to the authority by the company concerned, in relation to its business plan, of an annual progress report in a form to be specified by the authority,
(II) to ensure that money raised through a relevant issue is used by a company or its qualifying subsidiary only for one or more of the purposes specified in section 489(1)(c)(i) and for no other purposes,
(III) that the issue of the certificate does not represent any form of approval by the authority of the commercial viability of the qualifying trading operations carried on or to be carried on by the company concerned, and
(IV) for regarding as null and void from its date of issue a relevant certificate where the company concerned fails to comply with its business plan or any modification of that plan which may be agreed between it and the authority.
(2) In this section, “combined certificate” means a certificate given by an authority to a company which comprises—
(a) (i) a certificate referred to in section 489(2)(c),
(ii) an approval of a development and marketing plan referred to section 495(6)(a),
(iii) (I) an approval of a development and marketing plan referred to in section 495(4)(a), and
(II) a certificate referred to in section 496(7),
or
(iv) a certificate referred to in section 496(8),
and
(b) a relevant certificate.
(3) In this section, “authority” means—
(a) in respect of qualifying trading operations referred to in subparagraph (i), (ii), (vi) or (x) of section 496(2)(a), Forbairt, the Industrial Development Agency (Ireland), the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta (as may be appropriate); but, for the purposes of qualifying trading operations referred to in subparagraph (i) of section 496(2)(a), “authority” shall mean Bord Iascaigh Mhara in the case of those qualifying trading operations in respect of which Bord Iascaigh Mhara administers a scheme of assistance to grant aid,
(b) in respect of qualifying trading operations referred to in subparagraph (vii), (viii) or (xi) of section 496(2)(a), the Minister for Agriculture and Food,
(c) in respect of qualifying trading operations referred to in subparagraph (xii) of section 496(2)(a), the Minister for Arts, Heritage, Gaeltacht and the Islands,
(d) in respect of qualifying trading operations referred to in subparagraph (xiii) of section 496(2)(a), Bord Fáilte Éireann, and
(e) in respect of qualifying trading operations referred to in subparagraph (xiv) of section 496(2)(a), An Bord TrÁchtÁla.
(4) An authority shall not issue a combined certificate unless and until all necessary conditions have been satisfied for the issue of—
(a) in the first instance (as may be appropriate)—
(i) the certificate referred to in subparagraph (i) or (iv), as the case may be, of subsection (2)(a),
(ii) the approval referred to in subsection (2)(a)(ii), or
(iii) the approval and certificate referred to in subsection (2)(a)(iii),
and
(b) only thereafter, the relevant certificate.
(5) (a) Subject to this section, where on or after the 23rd day of January, 1996, a company raises any amount through the issue of eligible shares (in this section referred to as “the relevant issue”) for the purpose of qualifying trading operations other than those operations referred to in section 496(2)(a)(ix), relief shall not be given in respect of the excess of the amount over the amount determined by the formula set out in the Table to this subsection unless the company produces to the Revenue Commissioners a relevant certificate or a combined certificate.
(b) Where the company referred to in paragraph (a) is associated with one or more other companies within the meaning of section 491, then, A in the formula set out in the Table to this subsection shall include the aggregate of the amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue (other than the amount raised through the relevant issue) by all the companies so associated (including that company).
TABLE
£250,000 – A
where A is the lesser of—
(i) £250,000, or
(ii) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares before or on the date of the relevant issue (other than the amount raised through the relevant issue).
(6) Subsections (5) and (6) of section 491 shall, with any necessary modifications, apply for the purposes of this section as they apply for the purposes of that section.
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492 Individuals qualifying for relief.
(1) (a) An individual shall qualify for relief if he or she subscribes on his or her own behalf for eligible shares in a qualifying company and is not at any time in the specified period connected with the company.
(b) For the purposes of this section and paragraph 2 of Schedule 10, any question whether an individual is connected with a company shall be determined in accordance with this section.
(2) An individual shall be connected with a company if the individual or an associate of the individual is—
(a) a partner of the company, or
(b) subject to subsection (3), a director or employee of the company or of another company which is a partner of that company.
(3) An individual shall not be connected with a company by reason only that the individual or an associate of the individual is a director or employee of the company or of another company which is a partner of that company unless the individual or the individual’s associate (or a partnership of which the individual or the individual’s associate is a member) receives a payment from either company during the period of [3]>3 years<[3][3]>4 years<[3] beginning on the date on which the shares are issued or is entitled to receive such a payment in respect of that period or any part of it; but for that purpose there shall be disregarded—
(a) any payment or reimbursement of travelling or other expenses wholly, exclusively and necessarily incurred by the individual or the individual’s associate in the performance of the duties of the individual or of the associate, as the case may be, as such director or employee,
(b) any interest which represents no more than a reasonable commercial return on money lent to either company,
(c) any dividend or other distribution paid or made by either company which does not exceed a normal return on the investment,
(d) any payment for the supply of goods to either company in the course of a trade or business, which does not exceed their market value, and
(e) any reasonable and necessary remuneration which—
(i) (I) is paid for services rendered to either company in the course of a trade or profession, not being secretarial or managerial services or services of a kind provided by the company itself, and
(II) is taken into account in computing the profits or gains of the trade or profession under Case I or II of Schedule D or would be so taken into account if it fell in a period on the basis of which those profits or gains are assessed under that Schedule,
or
(ii) in a case where the individual is a director or an employee of either company and is not otherwise connected with either company, is paid for service, rendered to the company of which the individual is a director or an employee, in the course of the directorship or the employment.
(4) An individual shall be connected with a company [4]>if he or she<[4][4]>if the individual, or an associate of the individual,<[4] directly or indirectly possesses or is entitled [5]>to acquire more than 30 per cent of<[5][5]>to acquire any of<[5]—
(a) the issued ordinary share capital of the company,
(b) the loan capital and issued share capital of the company, or
(c) the voting power in the company.
(5) For the purposes of subsection (4)(b), the loan capital of a company shall be treated as including any debt incurred by the company—
(a) for any money borrowed or capital assets acquired by the company,
(b) for any right to receive income created in favour of the company, or
(c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium on the debt).
(6) (a) Subject to paragraph (b) an individual is connected with a company [6]>if he or she<[6][6]>if the individual, or an associate of the individual,<[6] directly or indirectly possesses or is entitled to acquire such rights as would, in the event of the winding up of the company or in other circumstances, entitle the individual [7]>to receive more than 30 per cent of<[7][7]>to receive any of<[7] the assets of the company which would at that time be available for distribution to equity holders of the company, and for the purposes of this subsection—
(i) the persons who are equity holders of the company, and
(ii) the percentage of the assets of the company to which the individual would be entitled,
shall be determined in accordance with sections 413 and 415, with references in section 415 to the first company being construed as references to an equity holder and references to a winding up being construed as including references to any other circumstances in which assets of the company are available for distribution to its equity holders.
(b) A determination in accordance with paragraph (a) shall be made without regard to section 411(1)(c) in so far as it relates to sections 413 and 415, with any necessary modifications, to such determination of the percentage of share capital or other amount which a shareholder beneficially owns or is beneficially entitled to, as they apply to the determination for the purposes of
Chapter 5 of Part 12 of the percentage of any such amount which a company so owns or is so entitled to.
(7) An individual is connected with a company if he or she has control of it within the meaning of section 11.
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(8) (a) An individual is not connected with a company by reason only of subsection (4), (6) or (7)—
(i) if throughout the specified period the aggregate of all amounts subscribed for the issued share capital and the loan capital (within the meaning of subsection (5)) of the company does not exceed €500,000, or
(ii) in the case of a specified individual, by virtue only of a relevant investment in respect of which he or she has been given relief in accordance with section 493(2) or (3).
(b) Notwithstanding paragraph (a), relief granted to an individual in respect of a subscription for eligible shares at a time when by virtue of this subsection the individual was not connected with the company shall not be withdrawn by reason only that the individual subsequently becomes connected with the company by virtue of subsection (4), (6) or (7).
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(8) For the purposes of subsections (4) and (6)(a), no account shall be taken of—
(a) shares in the company concerned which are held by the individual concerned where—
(i) that individual was entitled to relief under this Part in respect of the acquisition of those shares, and
(ii) that individual, or a person connected with that individual, does not at any time in the specified period control (within the meaning of section 432) the company concerned,
or
(b) shares subscribed for upon the formation of the company concerned where—
(i) the company has issued no shares other than those subscribed for on formation, and
(ii) the company has not yet commenced carrying on, or made preparations for the carrying on of, any trade or business.
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(9) For the purposes of this section, an individual shall be treated as entitled to acquire anything which he or she is entitled to acquire at a future date or will at a future date be entitled to acquire, and there shall be attributed to any person any rights or powers of any other person who is an associate of that person.
(10) In determining for the purposes of this section whether an individual is connected with a company, a debt incurred by the company by overdrawing an account with a person carrying on a business of banking shall not be treated as loan capital of the company if the debt arose in the ordinary course of that business.
(11) Where an individual subscribes for shares in a company with which the individual is not connected (either within the meaning of this section or by virtue of paragraph 2(2)(b) of Schedule 10), then he or she shall nevertheless be treated as connected with it if he or she subscribes for the shares as part of any arrangement which provides for another person to subscribe for shares in another company with which the individual or any other individual who is a party to the arrangement is connected (within the meaning of this section or by virtue of that paragraph).
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492. Qualifying subsidiaries
(1) In this Part, a qualifying subsidiary is one that—
(a) satisfies the conditions set out in subsection (2) and, except where provided in subsection (3), they continue to be so satisfied until the end of the relevant period, and
(b) is a company—
(i) to which section 490(3)(a)(i) relates, or
(ii) which exists solely for the purpose of carrying on any trade which consists solely of any one or more of the following relevant trading activities—
(I) the purchase of goods or materials for use by the qualifying company or its subsidiaries,
(II) the sale of goods or materials produced by the qualifying company or its subsidiaries, or
(III) the rendering of services to or on behalf of the qualifying company or its subsidiaries.
(2) The conditions referred to in subsection (1)(a) are—
(a) that the subsidiary is a 51 per cent subsidiary of the qualifying company,
(b) that no other person has control of the subsidiary, and
(c) that no arrangements are in existence by virtue of which the conditions specified in paragraphs (a) and (b) could cease to be satisfied.
(3) A company shall not be regarded as ceasing to be a qualifying subsidiary by reason only of the fact that it is wound up or dissolved without winding up if—
(a) it is shown that the winding up or dissolution is for bona fide commercial reasons and not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax, and
(b) the company’s net assets, if any, are distributed to its members before the end of the relevant period or, in the case of a winding up, the end (if later) of 3 years from the commencement of the winding up.
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Deleted by FA98 s34(a)(ii). Applies as respects eligible shares issued on or after the 3rd day of December, 1997.
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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.
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Substituted by FA14 s27(1)(d). Applies to shares issued on or after 13 October 2015 as per FA15 s18(1)(c).
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Substituted by FA17 s16(2)(a)(i). Has effect as respects shares issued on or after 2 November 2017.
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Substituted by FA17 s16(2)(a)(ii). Has effect as respects shares issued on or after 2 November 2017.
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Substituted by FA17 s16(2)(b)(i). Has effect as respects shares issued on or after 2 November 2017.
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Substituted by FA17 s16(2)(b)(ii). Has effect as respects shares issued on or after 2 November 2017.
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Substituted by FA17 s16(2)(c). Has effect as respects shares issued on or after 2 November 2017.