Revenue Precedents

Under section 617 certain assets can be transferred within a capital gains tax group without a chargeable gain arising. Instead, the transferee company takes the asset at the same time and cost at which it was originally acquired by the transferor company. The definition of a capital gains tax group in S.616 confines this relief to such group companies where both companies are resident in the State. In practice Revenue will allow similar relief in circumstances involving transfers within a non-resident CGT group where assets are transferred as part of a transfer of a trade carried on in the State where profits of the trade, including chargeable gains, are chargeable to Corporation Tax. The assets must be in use for the purpose of the trade and there must be no discontinuance of the trade i.e. the transferee will continue to carry on the trade. The transfer must also be for bona fide commercial reasons and not to avoid tax. To avail of this treatment a formal submission must be made to the Technical Services (CGT) area of the Office of the Chief Inspector of Taxes. This will involve formal undertakings from the transferee and the group parent in relation to the asset transferred. G60.