Taxes Consolidation Act, 1997 (Number 39 of 1997)
623 Company ceasing to be member of group.
[CTA76 s135 and FA96 s51]
(1) For the purposes of this section—
(a) 2 or more companies shall be associated companies if by themselves they would form a group of companies;
(b) a chargeable gain shall be deferred on a replacement of business assets if, by one or more claims under section 597, a chargeable gain on the disposal of those assets is treated as not accruing until the new assets within the meaning of that section cease to be used for the purpose of a trade carried on by the company making the claim;
(c) an asset acquired by the chargeable company shall be treated as the same as an asset owned at a later time by that company or an associated company if the value of the second asset is derived in whole or in part from the first asset, and in particular where the second asset is a freehold, and the first asset was a leasehold and the lessee has acquired the reversion;
(d) references to a company ceasing to be a member of a group of companies shall not apply to cases where a company ceases to be a member of a group by being wound up or dissolved or in consequence of another member of the group being wound up or dissolved where the winding up or dissolution of the member or the other member, as the case may be, is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
(2) Where a company (in this section referred to as “the chargeable company”) ceases to be a member of a group of companies, this section shall apply as respects any asset which the chargeable company acquired from another company which was at the time of acquisition a member of that group of companies, but only if the time of acquisition fell within the period of 10 years ending with the time when the company ceases to be a member of the group.
(a) a company (in this section referred to as the “chargeable company”) which is a member of a group of companies acquires an asset from another company which at the time of acquisition was a member of the group,
(b) the chargeable company ceases to be a member of the group within the period of 10 years after the time of the acquisition,
(c) the chargeable company is resident in the State at the time of acquisition of the asset, or the asset is a chargeable asset in relation to that company immediately after that time, and
(d) the other company is resident in the State at the time of that acquisition, or the asset is a chargeable asset in relation to that company immediately before that time.
(2A) (a) This section does not apply to a bank asset where that asset is acquired on or after the establishment day by—
(i) NAMA, or
(ii) a company to which section 616(1)(g) relates from that Agency or a company to which that paragraph relates.
(b) In this subsection “bank asset”, “establishment day” and “NAMA” have the same meanings, respectively, as they have in the National Asset Management Agency Act 2009.
(3)(a) Where 2 or more associated companies (in this subsection referred to as “the associated companies”) cease to be members of a group at the same time—
(i) subsection (2) shall not apply as respects an acquisition by one from another of the associated companies, and
(I) a dividend has been paid or a distribution has been made by one of the associated companies to a company which is not one of the associated companies, and
(II) the dividend so paid or the distribution so made has been paid or made, as the case may be, wholly or partly out of profits which derive from the disposal of any asset by one to another of the associated companies,
the amount of the dividend paid or the amount or value of the distribution made, to the extent that it is paid or made, as the case may be, out of those profits, shall be deemed for the purposes of the Capital Gains Tax Acts to be consideration (in addition to any other consideration) received by the member of the group or former member of the group in respect of a disposal, being a disposal which gave rise to or was caused by the associated companies ceasing to be members of the group.
(b) Paragraph (a)(ii) shall not apply to a distribution other than a dividend where a company ceases to be a member of a group of companies before the 23rd day of April, 1996.
(4) If when the chargeable company ceases to be a member of the group the chargeable company, or an associated company also leaving the group, owns otherwise than as trading stock—
(a) the asset referred to in subsection (2), or
(b) property on the acquisition of which a chargeable gain in relation to the asset has been deferred on a replacement of business assets,
the chargeable company shall be treated for the purposes of the Capital Gains Tax Acts as if immediately after its acquisition of the asset it had sold and immediately reacquired the asset at market value at that time >and, solely for the purpose of determining when such tax is due and payable, as if any tax charged in respect of a chargeable gain that accrued from such a sale and reacquisition were tax for the accounting period of the chargeable company in which it ceases to be a member of the group<.
(5) Where any of the corporation tax assessed on a company in consequence of this section is not paid within 6 months from the date when it becomes payable, then—
(a) a company which on that date, or immediately after the chargeable company ceased to be a member of the group, was the principal company of the group, and
(b) a company which owned the asset on that date or when the chargeable company ceased to a member of the group,
may, at any time within 2 years from the time when the tax became payable, be assessed and charged (in the name of the chargeable company) to all or any part of that tax, and a company paying any amount of tax under this subsection shall be entitled to recover a sum of that amount from the chargeable company.
(6) Notwithstanding any limitation on the time for making assessments, an assessment to corporation tax chargeable in consequence of this section may be made at any time within 10 years from the time when the chargeable company ceased to be a member of the group, and where under this section the chargeable company is to be treated as having disposed of and reacquired an asset, all such recomputations of liability in respect of other disposals, and all such adjustments of tax, whether by means of assessment or by means of discharge or repayment of tax, as may be required in consequence of this section shall be made.
(7) For the purposes of this section, a ‘group of companies’ shall include only companies which, by virtue of the law of a relevant Member State or other territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made, are resident for the purposes of tax in such Member State or territory, as the case may be, and for this purpose ‘tax’, in relation to a relevant Member State or such territory, other than the State, means any tax imposed in the Member State or territory which corresponds to corporation tax in the State.
Substituted by FA01 s38(1)(i). Applies as respects an asset acquired on or after 15 February 2001.
Inserted by the National Asset Management Agency Act 2009 Sched 3 part 10.
Inserted by FA14 s41. Comes into operation on 1 January 2015.
Inserted by FA17 s31(c). Comes into operation on 1 January 2018.