Revenue Note for Guidance
This section enables the Revenue Commissioners to enter into arrangements with certain unit trusts (“qualifying unit trusts”) having substantial public participation to ensure that there will not be any disadvantage to an individual small investor through purchasing units instead of investing directly in quoted securities.
The unit trusts to which the section applies are those registered under the Unit Trusts Act, 1972, which satisfy certain conditions.
In relation to such trusts one half of the normal capital gains tax rate applies to —
(1) “securities” and “quoted securities” are defined for the purposes of reference to them in subsection (6).
(2)(a) The section applies to a unit trust (called a “qualifying unit trust”) which complies with certain conditions. These conditions are —
(2)(b) The section applies to disposals of units (called “qualifying units”) in a unit trust which is a “qualifying unit trust”.
(6) The additional conditions which a unit trust must fulfil in order to be a qualifying unit trust are —
(7) A 2 year period from the date of registration can be allowed to a unit trust to enable it to comply with these conditions.
(3) Chargeable gains accruing to a qualifying unit trust in any year of assessment are chargeable to capital gains tax at one-half of the normal capital gains tax rate.
(4) The effective capital gains tax rate applicable to the disposal of qualifying units is one-half of the normal capital gains tax rate.
(5) The effective corporation tax rate applicable to disposals of qualifying units by a company is also equal to one-half of the normal capital gains tax rate.
Relevant Date: Finance Act 2021