Revenue Note for Guidance

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Revenue Note for Guidance

633 Company reconstruction or amalgamation: transfer of development land


This section extends to development land the reliefs available in respect of other assets on a company reconstruction or amalgamation.


Where a company transfers land to another company in connection with a scheme of reconstruction or amalgamation and the company would be entitled to the reliefs provided for by section 615 but for the fact that the land is development land, the company is entitled to have the transaction treated as giving rise to a no gain/no loss for capital gains tax purposes. In that case, the company acquiring the land is treated as having acquired it at the time and for the consideration at which it was originally acquired by the company making the disposal.

If the disposal takes place in the course of a transfer of a trade or part of a trade to which relief under section 631 is available, relief is not to be given under this section.

This section provides relief for gains on the transfer of development land in the circumstances in which such relief would be due in respect of other assets. It only applies therefore where both companies are resident in the State.

Section 615 applies only for the purposes of corporation tax. Section 78 provides that an amount representing chargeable gains arising to a company is to be included in its profits chargeable to corporation tax. Trading losses incurred by a company may be set off against its profits, including the amount representing chargeable gains. Section 649 requires that gains on development land are not to be included in profits for corporation tax purposes but are instead to be charged to capital gains tax. In the circumstances, section 631 does not apply to such development land gains. This section provides relief for development land gains similar to that available under section 631 in respect of other assets.

Relevant Date: Finance Act 2021