Revenue Tax Briefing

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Revenue Tax Briefing Issue 52, May 2003

Finance Act 2003 - Capital Gains Tax

Extract from Tax Briefing

Section 66 removes the facility to defer capital gains tax by the issue of debentures, loan stock or other similar securities under the following provisions of the Taxes Consolidation Act 1997:

  • Section 584 (reorganisation or reduction of share capital);
  • Section 585 (conversion of securities)
  • Section 586 (company amalgamations by exchange of shares); and
  • Section 587 (company reconstructions and amalgamations).

Subject to two transitional provisions, the change takes effect in relation to an issue or allotment of debentures etc. on or after 4 December 2002, unless such an issue or allotment is made pursuant to a written binding agreement made before that date. However, capital gains tax deferral will still apply where debentures are issued on or after that date by one company to another company under a company amalgamation by exchange of shares (Section 586) or under a company reconstruction and amalgamation(Section 587) where both companies are members of the same group for the purposes of Section 616 TCA 1997.