Revenue Note for Guidance
This section provides that the disposal of a chargeable asset (other than trading stock) within a group of companies is to be treated as having been for a consideration of such an amount that neither a gain nor a loss accrues to the company making the disposal. Certain financial transactions are excluded. Where the consideration for a disposal consists of compensation for damage to an asset, the disposal is to be treated as being to the person who ultimately bears the burden. In the case of the transfer of a specified intangible asset within the meaning of section 291A, the section allows companies to opt out of the capital gains tax group relief provision so that the acquiring company may claim capital allowances under section 284, as applied by section 291A.
(1) Where a member of a group of companies disposes of a chargeable asset to another member of the group the disposal is to be treated as if the consideration received by the company making the disposal is such that it gives rise to neither a gain nor a loss provided certain conditions are met.
These are that —
As set out in section 616 membership of a group is open to companies resident in Member States of the European Union and to companies resident in Member States of the EEA with whom Ireland has a tax treaty.
(2) Excluded from the relief are —
(3) Where the consideration received on a disposal of an asset from one group member to another takes the form of compensation for damage or injury to the asset, the consideration is deemed to be received from the person who ultimately bears the burden of the consideration (be that the insurer or otherwise).
(4) This section will not apply to the disposal of a specified intangible asset by one group member to another group member where both the company disposing of the asset and the company acquiring the asset so elect by giving notice in writing to the Collector-General, not later than 12 months from the end of the accounting period in which the other member of the group acquired the asset.
(5) For the purposes of the section, a “group of companies” includes companies which, under the law of a relevant Member State or other territory with which this country has a double tax treaty, are resident for tax purposes in such Member State or territory. In this context, “tax” means any tax in the Member State or territory which corresponds to corporation tax in the State.
Relevant Date: Finance Act 2021