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Taxes Consolidation Act, 1997 (Number 39 of 1997)

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739G Taxation of unit holders in investment undertakings.Taxation of unit holders in investment undertakings.

(1) Where a chargeable event in relation to an investment undertaking in respect of a unit holder is deemed to happen on 31 December 2000 and the unit holder is an excepted unit holder referred to in section 739D(8), the unit holder shall be treated for all the purposes of the Capital Gains Tax Acts as if the amount of the gain which, but for section 739D(8)(b), would have arisen to the investment undertaking on the happening of the chargeable event, were a chargeable gain accruing to the unit holder at that time and notwithstanding section 28, the rate of capital gains tax in respect of that chargeable gain shall be 40 per cent.

(2) As respects a payment in money or money’s worth to a unit holder by reason of rights conferred on the unit holder as a result of holding units in an investment undertaking to which this Chapter applies—

(a) where the unit holder is not a company and the payment is a payment from which appropriate tax has been deducted, the payment shall not be reckoned in computing the total income of the unit holder for the purposes of the Income Tax Acts and shall not be treated as giving rise to a chargeable gain under the Capital Gains Tax Acts,

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(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the amount of the payment shall be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

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(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the amount of the payment shall be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money’s worth given by the unit holder for the acquisition of those units,

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(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the payment shall be treated as if it were a payment from an offshore fund to which the provisions of Chapter 4 of this Part apply, and the provisions of section 747D, or section 747E apply as appropriate,

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(c) where the unit holder is a company, the payment is a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted [11]>at the standard rate,<[11][11]>at the rate [12]>determined in accordance with<[12][12]>specified in<[12] [13]>section 739E(1)(a)<[13][13]>section 739E(1)(a)(i)<[13],<[11]

(d) where the unit holder is a company, the payment is a relevant payment and appropriate tax has not been deducted from the payment, the amount of the payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

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(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted therefrom, such payment shall, subject to paragraph (g), not be taken into account for the purposes of the Tax Acts,

(f) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

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(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted therefrom, such payment shall, subject to paragraph (g), not otherwise be taken into account for the purposes of the Tax Acts,

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(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the rate specified in section 739E(1)(b)(i),

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(f) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money’s worth given by the unit holder for the acquisition of those units,

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(g) where the unit holder is a company chargeable to tax on the payment under Case I of Schedule D[8]>, or is a qualifying company within the meaning of section 110 that is chargeable to tax on the payment under Case III of Schedule D<[8]

(i) subject to subparagraph (ii), the amount received by the unit holder increased by the amount (if any) of appropriate tax deducted shall be income of the unit holder for the chargeable period in which the payment is made,

(ii) where the payment is made on the cancellation, redemption or repurchase of units by the investment undertaking, such income shall be reduced by the amount of the consideration in money or money’s worth given by the unit holder for the acquisition of those units, and

(iii) the amount (if any) of appropriate tax deducted shall be set off against corporation tax assessable on the unit holder for the chargeable period in which the payment is made,

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(h) the amount of a payment made to a unit holder by an investment undertaking, where the unit holder is a company which is not resident in the State or the unit holder, not being a company, is neither resident nor ordinarily resident in the State, [9]>shall not be [4]>chargeable to income tax, and<[4][4]>chargeable to income tax,<[4]<[9][9]>shall not be chargeable to income tax or capital gains tax,<[9]

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(h) the amount of a payment made to a unit holder—

(i) by an investment undertaking, or

(ii) arising from the transfer by way of sale, or otherwise, of an entitlement to a unit in an investment undertaking,

shall not be chargeable to income tax or capital gains tax where the unit holder is a company which is not resident in the State or the unit holder, not being a company, is neither resident nor ordinarily resident in the State,

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(i) no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax.

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(i) otherwise than by virtue of section 739F(5) or paragraph (j), no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax, and

(j) notwithstanding paragraph (a), for the purposes of a claim to relief, under [16]>section 189, 189A or 192<[16][16]>section 189, 189A, 192 or 205A<[16], or a repayment of income tax in consequence thereof, the amount of a payment made to a unit holder shall be treated as a net amount of income from the gross amount of which has been deducted income tax (of an amount equal to the amount of appropriate tax deducted in making the payment), and such gross amount of income shall be treated as chargeable to tax under Case III of Schedule D.

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(2A) Where a gain arises on a chargeable event to which paragraph (ccc) in section 739B(1) refers, and section 739E(2) does not apply to that chargeable event by virtue of subsection (2A) of that section, then such gain—

(a) shall be treated for the purposes of the Tax Acts as arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D at the rate specified in section 739E(1)(b), and

(b) shall not be reckoned in computing total income for the purposes of the Tax Acts,

and section 188, and the reductions specified in Part 2 of the Table to section 458, shall not apply as regards the tax so charged.

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(3) References in subsection (2) to payments, from which appropriate tax has not been deducted, made to a unit holder by an investment undertaking, include references to payments made to a unit holder who holds units which are held in a recognised clearing system.

(4) Where the units of an investment undertaking are denominated in a currency other than the currency of the State (in this subsection referred to as “foreign currency”), then for the purposes of the Capital Gains Tax Acts the amount of foreign currency given by a unit holder to the investment undertaking for the acquisition of a unit in the investment undertaking shall be deemed to have been disposed of and reacquired by the unit holder—

(a) immediately before it was so given, and

(b) immediately after the unit holder receives payment for the cancellation, redemption or repurchase of, or as the case may be, transfer of, his or her units.

(5) Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 104 of the Capital Acquisitions Tax Consolidation Act 2003.

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Inserted by FA00 s58(a).

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Substituted by FA01 s74(1)(e)(i)(I). Applies on or after 1 April 2000.

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Substituted by FA01 s74(1)(e)(i)(II). Applies on or after 1 April 2000.

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Substituted by FA01 s74(1)(e)(i)(III). Applies on or after 1 April 2000.

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Substituted by FA01 s74(1)(e)(i)(IV). Applies on or after 1 April 2000.

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Inserted by FA01 s74(1)(e)(ii). Applies on or after 1 April 2000.

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Substituted by FA03 s53(e).

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Inserted by FA06 s52(b).

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Substituted by FA06 s53(1). This section applies with effect from the passing of this Act. FA06 31 March 2006

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Inserted by FA08 s39(1)(d). Applies and has effect as respects any chargeable event (within the meaning of section 739B(1)) occurring on or after 13 March 08.

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Substituted by F(No.2)A08 s27(1)(c)(iii). Applies and has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1)) on or after 1 January 2009.

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Substituted by FA09 s10(4)(e). Applies and has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1)) on or after 8 April 2009.

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Substituted by FA12 s28(4)(e). Has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1)) on or after 1 January 2012.

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Substituted by FA12 s28(4)(f). Has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1)) on or after 1 January 2012.

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Substituted by FA12 s32. Deemed to have come into force and takes effect on and from 1 January 2012.

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Substituted by FA18 s16(4). Comes into operation on 1 January 2019.