739k Interpretation

(1) In this Chapter—

“accounting period” means the period for which an investment undertaking or sub-fund, as the case may be, makes up its accounts and subsections (2) and (3) of section 27 shall have application for the purposes of determining the accounting period of an investment undertaking or sub-fund;

“accrued IREF profits” means the IREF profits, including any retained IREF profits, that have arisen and accrued to a unit since that unit was acquired by the person who, on the happening of an IREF taxable event, is the unit holder;

“arrangement” includes any agreement, understanding, scheme, course of action, course of conduct, transaction or series of transactions;

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“balance sheet” means the balance sheet, statement of financial position or equivalent prepared in respect of an investment undertaking or sub-fund, as the case may be, in accordance with international accounting standards or alternatively in accordance with the generally accepted accounting practice specified in the investment undertaking’s prospectus;

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“connected” has the meaning assigned to it in section 10;

“EEA state” means a state, not being a Member State or the State, which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992 as adjusted by the Protocol signed at Brussels on 17 March 1993;

“income statement” means the profit and loss account, income statement or equivalent prepared in respect of an investment undertaking or sub-fund, as the case may be, in accordance with international accounting standards or alternatively in accordance with the generally accepted accounting practice specified in the investment undertaking's prospectus;

“IREF” means an investment undertaking or, where that investment undertaking is an umbrella scheme, a sub-fund of an investment undertaking—

(a)in which 25% or more of the value of the assets at the end of the immediately preceding accounting period is derived directly or indirectly from IREF assets, or

(b)where paragraph (a) does not apply, it would be reasonable to consider that the main purpose, or one of the main purposes, of the investment undertaking or the sub-fund, as the case may be, was to acquire IREF assets or to carry on an IREF business,

other than an investment undertaking within the meaning of paragraph (b) of the definition of “investment undertaking” in section 739B, and where this Chapter applies to a sub-fund of an umbrella scheme, for the purposes of the calculation, assessment and collection of any tax due under this Chapter, each sub-fund of such umbrella scheme shall be treated as a separate legal person;

“IREF assets” means one or more of the following held by an IREF:

(a)relevant assets (within the meaning of section 29(1A));

(b)shares in a REIT (within the meaning of Part 25A);

(c)shares deriving their value or the greater part of their value directly or indirectly from the assets referred to in paragraph (a) or (b), other than shares quoted on a stock exchange^[9]>, which are actively and substantially traded on such stock exchange,^<[9] except as provided for in paragraph (b) of this definition;

(d)specified mortgages, ^[12]>(within the meaning of section 110(5A))^<[12] other than those which—

(i)are issued by a qualifying company as part of a CLO transaction, a CMBS/RMBS transaction or a loan origination business (each within the meaning of section 110), or

(ii)form part of a loan origination business of the IREF, and any necessary amendments to the definition of “loan origination” shall be made so that it applies to a business carried on by an IREF rather than a qualifying company;

(e)units in an IREF;

“IREF business” means activities involving IREF assets, the profits or gains of which, apart from section 739C, would be chargeable to income tax, corporation tax or capital gains tax, including, but without limitation to the generality of the preceding words, activities which would be regarded as—

(a)dealing in or developing land, or

(b)a property rental business; “IREF excluded profits” means—

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(a) in relation to a unit holder in respect of which an IREF is not a personal portfolio IREF having regard to the IREF assets concerned (other than those referred in paragraphs (b) to (e) of the definition of “IREF assets”)—

(i) any profits or gains as shown in the income statement of the IREF in relation to the disposal of those assets where—

(I) such asset was held by the IREF, or an investment undertaking of which the IREF is a sub-fund, for a period of at least 5 years from the date on which it was acquired, and

(II) the disposal of such asset would be a disposal of a chargeable asset for the purposes of capital gains tax or corporation tax on chargeable gains and would otherwise form part of relevant profits of the IREF which are not chargeable to tax under section 739C,

and

(ii) any unrealised profits or gains as shown in the income statement of the IREF in relation to those assets where the disposal of such asset would be a disposal of a chargeable asset for the purposes of capital gains tax or corporation tax on chargeable gains and would otherwise form part of relevant profits of the IREF which are not chargeable to tax under section 739C,

and where such asset was acquired through a transaction in respect of which relief was availed of under section 615 or 617, excluded profits shall be calculated with reference to the market value of the asset on its acquisition,

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(b)in relation to shares, within the meaning of paragraph (c) of the definition of “IREF assets”, any distribution made in relation to those shares, and

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(c)in relation to shares, within the meaning of paragraph (b) of the definition of “IREF assets”, any profits or gains other than property income dividends in relation to those shares;

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(c) in relation to shares, within the meaning of paragraph (b) of the definition of ‘IREF assets’, any profits or gains other than—

(i) property income dividends, or

(ii) distributions in respect of gains accruing on the disposal of assets of the property rental business of the REIT or group REIT concerned, as the case may be,

in relation to those shares;

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“IREF profits” means the profits and gains of an IREF business as shown in the income statement of the IREF, any amount of the profits and gains realised on the disposal of an IREF asset (other than those referred to in paragraphs (b) to (e) of the definition of “IREF assets”) not otherwise shown in the income statement and excluding IREF excluded profits;

“IREF taxable amount”, in relation to an IREF taxable event and a unit holder, means an amount calculated in accordance with section 739L;

“IREF taxable event” in respect of a unit holder means—

(a)the making of a relevant payment,

(b)the cancellation, redemption or repurchase of units from a unit holder, including on a liquidation,

(c)any exchange by a unit holder of units in a sub-fund of an investment undertaking for units in another sub-fund of that investment undertaking,

(d)the issuing of units as paid-up, otherwise than by the receipt of new consideration,

(e)an IREF ceasing to be an IREF including on it ceasing to be an investment undertaking or on it ceasing to have 25 per cent of its value derived from IREF assets,

(f)the disposal of a unit by a unit holder, other than in circumstances that would give rise to an IREF taxable event under paragraph (b) or (c), or

(g)the sale or transfer of the right to receive any of the accrued IREF profit without the sale or transfer of the unit to which the accrued IREF profit relates or where the accrued IREF profit in respect of the unit becomes receivable otherwise than by the unit holder;

“IREF withholding tax”, in relation to an IREF taxable event, means a sum representing income tax at a rate of 20 per cent on the IREF taxable amount;

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“market value” shall be construed in accordance with section 548;

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“PEPP” has the same meaning as in Chapter 2D of Part 30;

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“PRSA” means a Personal Retirement Savings Account within the meaning of section 787A;

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“purchased IREF profits” means the IREF profits, including any retained IREF profits, which have arisen and accrued to a unit prior to that unit being acquired by the unit holder;

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“qualifying intermediary” means an intermediary (within the meaning of section 739B(1)) who is authorised by the Central Bank of Ireland under—

(a) before 3 January 2018, the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No. 60 of 2007), and

(b) on and after 3 January 2018, the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017);

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“relevant payment”, means a payment including a distribution, whether in cash or non-cash, made to a unit holder by an IREF by reason of the rights conferred to the unit holder as a result of holding a unit or units in the IREF, other than a payment made in respect of the cancellation, redemption or repurchase of a unit;

“retained IREF profits” means the portion of the retained profits of the investment undertaking attributable to the IREF profits, and where those profits arose in an accounting period which commenced prior to 1 January 2017 or 20 October 2016, as the case may be, those profits shall be the profits which would be IREF profits if they arose in an accounting period which commenced on or after that date;

“specified person” means a unit holder in respect of which a gain is not treated as arising to an investment undertaking on the happening of a chargeable event under subsection (6) (other than paragraphs (cc), (e), and (kb)), (7), (7A) (as it applies to a declaration made under subsection (6) or (7)), (7B) (as it applies to a declaration made under subsection (7) or (9)), (8), (8A), (8D), (8E), (9) or (9A) of section 739D, but shall not, subject to section 739M, include—

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(a)a fund approved under section 774, 784(4) or 785(5), a PRSA within the meaning of section 787A, or a person exempt from income tax under section 790B,

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(a) a fund approved under section 774, 784(4) or 785(5), an approved retirement fund within the meaning of section 784A, an approved minimum retirement fund within the meaning of section 784C, a PRSA ^[15]>(including a vested PRSA within the meaning of section 790D(1))^<[15][15]>(including a vested PRSA within the meaning of section 790D(1)), a PEPP (including a vested PEPP within the meaning of 790D(1))^<[15] or a person exempt from income tax under section 790B (collectively referred to in this Chapter as ‘pension schemes’),

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(b)an investment undertaking,

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(b) an investment undertaking, or, where appropriate, a subfund that is a unit holder in another sub-fund of the same umbrella scheme,

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(c)a company carrying on life business (within the meaning of section 706),

(d)a person who is exempt from—

(i)income tax under Schedule D by virtue of section 207(1)(b), or

(ii)corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),

(e)a credit union,

(f)a ^[6]>scheme^<[6][6]>pension scheme^<[6], undertaking or company equivalent to those referred to in paragraphs (a) to (c), authorised by a Member State or an EEA state and subject to supervisory and regulatory arrangements at least equivalent to those applied to those ^[6]>schemes^<[6][6]>pension schemes^<[6], undertakings or companies, as the case may be, in the State, or

(g)a qualifying company, within the meaning of section 110, where the IREF is in possession of a ^[7]>valid declaration^<[7][7]>valid declaration made by the unit holder or, where applicable under subsection (1A), by the qualifying intermediary^<[7], in accordance with Schedule 2C, immediately before the IREF taxable event;

“TIN” has the meaning assigned to it in section 891F and includes a tax reference number as defined in section 891B;

“umbrella scheme” has the meaning given to it in section 739B.

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“value of an IREF taxable event” in relation to an IREF taxable event within the meaning of—

(a) paragraph (a) of the definition of ‘IREF taxable event’, means the value of the relevant payment,

(b) paragraphs (b), (c), (d), (e) and (f) of the definition of ‘IREF taxable event’, means the market value of the unit less any amount subscribed for that unit, and

(c) paragraph (g) of the definition of ‘IREF taxable event’, means the amount of the accrued IREF profits sold or transferred;

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(1A) A qualifying intermediary who carries on a trade which consists of, or includes, the holding in a nominee capacity of units in an IREF, that is not a personal portfolio IREF, on behalf of unit holders (that come within paragraphs (a), (d) or (e) of the definition of ‘specified person’, or within paragraph (f) of that definition pursuant to its reference to paragraph (a) thereof), may make a declaration in accordance with Schedule 2C, on behalf of those unit holders in respect of that IREF.

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(2) In calculating the portion of the value of assets of an investment undertaking or sub-fund attributable to IREF assets for the purposes of determining whether or not an investment undertaking or sub-fund is an IREF—

(a)account shall not be taken of any arrangement that—

(i)involves a transfer of assets, other than IREF assets, from a person connected with—

(I) the investment undertaking or sub-fund, as the case may be, or

(II) a unit holder in the investment undertaking or sub-fund, and

(ii)the main purpose or one of the main purposes of which is the avoidance of tax under this Chapter,

and

(b)regard shall be had to the gross value of the assets of which the IREF asset is part.