Revenue Note for Guidance

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Revenue Note for Guidance

600L Anti-avoidance: qualifying investment (investor perspective)

Summary

Section 600L is an anti-avoidance provision in relation to the investment from the perspective of the investor. This section provides the investment will not be a qualifying investment in respect of a person, if at any point in the 3 years from the date of the investment, the company or its qualifying subsidiary carries on a business previously carried on by that person (or their associates) and includes any business that the person (or their associates) had more than 50% interest in. For these purposes, the person to whom a business belongs and, where a business belongs to two or more persons any interest, rights or powers of a person shall be determined in accordance with section (1)(a), (1)(b), (2) and (3) of section 400 and includes interest held by associates.

Details

(1)The conditions that will result in an investment not being considered a qualifying investment are as follows.

(1)(a)An investment will not be a qualifying investment in respect of a person if at any point in the 3 years from the date of the investment, the company or any of its qualifying subsidiaries either—

  1. (a)(i)begins to carry on a business previously carried on by that person, or
  2. (a)(ii)acquires the whole or greater part of the assets used for the purpose of a business previously so carried on.

(1)(b)This anti-avoidance section applies to an individual where—

  1. (b)(i)any person or group of persons that had an interest of more than 50% in the business (as previously carried on) during the 3 years from the date of investment, or
  2. (b)(ii)any person or group of persons who controls or has at any time controlled the company is a person or a group of persons who at any time controlled another company which previously carried on the business,

and the individual is that person or one of those persons.

(2)An individual shall not be entitled to relief under section 600M in respect of any shares in a company where—

  1. (2)(a)the company acquires all of the issued share capital of another company during the 3 years from the date of investment, and
  2. (2)(b)any person or group of persons who controls or has at any time controlled the company is a person or a group of persons who at any time controlled that other company,

and the individual is that person or one of those persons.

(3)For the purposes of subsection (1)(b)—

  1. (3)(a)the person or persons to whom a business belongs and, where a business belongs to two or more persons their respective shares in that business shall be determined in accordance with subsections (1)(a), (1)(b), (2) and (3) of section 400 TCA 1997, and
  2. (3)(b)any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person.

Relevant Date: Finance Act 2024