|
|
Amendment of Part 20 (companies' chargeable gains) of Principal Act.
|
38.—(1) Part 20 of the Principal Act is amended—
|
|
| |
(a) in section 615 as respects a disposal on or after 15 February 2001 by the substitution for subsection (2) of the following:
|
|
| |
“(2) (a) Subject to this section, where—
|
|
| |
(i) any scheme of reconstruction or amalgamation involves the transfer of the whole or part of a company's business to another company,
|
|
| |
(ii) (I) the company acquiring the assets is resident in the State at the time of the acquisition, or the assets are chargeable assets in relation to that company immediately after that time, and
|
|
| |
(II) the company from which the assets are acquired is resident in the State at the time of the acquisition, or the assets are chargeable assets in relation to that company immediately before that time,
|
|
| |
and
|
|
| |
(iii) the first-mentioned company receives no part of the consideration for the transfer (otherwise than by the other company taking over the whole or part of the liabilities of the business),
|
|
| |
then, in so far as relates to corporation tax on chargeable gains, both companies shall be treated as if any assets included in the transfer were acquired by the one company from the other company for a consideration of such amount as would secure that on the disposal by means of the transfer neither a gain nor a loss would accrue to the company making the disposal, and for the purposes of section 556 the acquiring company shall be treated as if the respective acquisitions of the assets by the other company had been the acquiring company's acquisition of the assets.
|
|
| |
(b) For the purposes of paragraph (a)—
|
|
| |
(i) an asset is a ‘chargeable asset’ in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain, and
|
|
| |
(ii) a reference to a company shall apply only to a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State, and for this purpose ‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.”,
|
|
| |
(b) in section 616—
|
|
| |
(i) in subsection (1)—
|
|
| |
(I) by the substitution for paragraph (a) of the following:
|
|
| |
“(a) subject to section 621(1), a reference to a company or companies shall apply only to a company or companies, as limited by subsection (2), being a company or, as the case may be, companies which, by virtue of the law of a Member State of the European Communities, is or are resident for the purposes of tax in such a Member State, and for this purpose ‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State, and references to a member or members of a group of companies shall be construed accordingly;”,
|
|
| |
(II) in paragraph (e) by the substitution of “State;” for “State.”, and
|
|
| |
(III) by the insertion after paragraph (e) of the following:
|
|
| |
“(f) an asset is a ‘chargeable asset’ in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain.”,
|
|
| |
and
|
|
| |
(ii) in subsection (2)(b), by the deletion of “(although resident in the State)”,
|
|
| |
(c) in section 617 as respects a disposal on or after 15 February 2001 by the substitution for subsection (1) of the following:
|
|
| |
“(1) Notwithstanding any provision in the Capital Gains Tax Acts fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition, where—
|
|
| |
(a) a member of a group of companies disposes of an asset to another member of the group,
|
|
| |
(b) the company making the disposal is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately before that time, and
|
|
| |
(c) the other company is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately after that time,
|
|
| |
both members shall, except where provided by subsections (2) and (3), be treated, in so far as relates to corporation tax on chargeable gains, as if the asset acquired by the member to whom the disposal is made were acquired for a consideration of such amount as would secure that on the other member's disposal neither a gain nor a loss would accure to that other member; but, where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale to or acquisition from another member of the group.”,
|
|
| |
(d) in section 618 as respects an acquisition or disposal on or after 15 February 2001—
|
|
| |
(i) by the substitution for subsection (1) of the following:
|
|
| |
“(1) Where—
|
|
| |
(a) a company which is a member of a group of companies acquires an asset as trading stock of a trade to which this section applies,
|
|
| |
(b) the acquisition is from another company which is a member of the group, and
|
|
| |
(c) the asset did not form part of the trading stock of any such trade carried on by the other company,
|
|
| |
the company acquiring the asset shall be treated for the purposes of section 596 as having acquired the asset otherwise than as trading stock and immediately appropriated it for the purposes of the trade as trading stock.”,
|
|
| |
(ii) by the insertion in subsection (2) after “formed part of the trading stock of a trade” of “to which this section applies”, and
|
|
| |
(iii) by the insertion after subsection (2) of the following:
|
|
| |
“(3) This section applies to—
|
|
| |
(a) a trade carried on by a company which is resident in the State, and
|
|
| |
(b) a trade carried on in the State through a branch or agency by a company which is not so resident.”,
|
|
| |
(e) in section 619 as respects an acquisition on or after 15 February 2001 in subsections (1) and (2) by the substitution of “in the course of a disposal to which section 617 applies” for “at a time when both were members of the group”,
|
|
| |
(f) by the substitution for section 620 of the following:
|
| | |
“Replacement of business assets by members of group.
|
620.—(1) For the purposes of this section ‘old assets’ and ‘new assets’ have the same meanings as in section 597.
(2) Subject to subsection (4), for the purposes of section 597 all the trades to which this section applies carried on by members of a group of companies shall be treated as a single trade (except in a case of one member of the group acquiring, or acquiring the interest in, the new assets from another member or disposing of, or disposing of the interest in, the old assets to another member).
(3) This section applies to—
(a) any trade carried on by a company which is resident in the State, and
(b) any trade carried on in the State through a branch or agency of a company which is not so resident.
(4) This section shall not apply unless—
(a) the company disposing of the old assets is resident in the State at the time of the disposal, or the assets are chargeable assets in relation to that company immediately before that time, and
(b) the company acquiring the new assets is resident in the State at the time of acquisition, or the assets are chargeable assets in relation to that company immediately after that time.”,
|
|
|
| |
(g) by the insertion after section 620 of the following:
|
| | |
“Deemed disposal in certain circumstances.
|
620A.—(1) This section applies in relation to a company where—
(a) at any time on or after 15 February 2001 an asset ceases to be a chargeable asset in relation to the company—
(i) where at the time of the acquisition of the asset by the company the asset consisted of shares deriving their value or the greater part of their value from assets specified in paragraph (a) or (b) of section 29(3), by virtue of the assets ceasing to so derive their value or the greater part of their value, or
(ii) by virtue of the asset becoming situated outside the State,
and
(b) (i) the company acquired the asset in the course of—
(I) a transfer to which section 615 applies, or
(II) a disposal to which section 617 applies,
or
(ii) by virtue of section 620 the asset constitutes new assets for the purposes of section 597.
(2) Where this section applies in relation to a company, the company shall be deemed for the purposes of the Capital Gains Tax Acts and the Corporation Tax Acts—
(a) to have disposed of the asset immediately before the time when it ceased to be a chargeable asset in relation to the company, and
(b) immediately to have reacquired it,
at its market value at that time.”,
|
|
|
| |
(h) in section 621 as respects a case in which the depreciatory transaction (within the meaning of section 621) is on or after 15 February 2001 by the substitution for the definition of a group of companies of the following:
|
|
| |
“a group of companies' may consist of companies some or all of which are not resident for the purposes of tax in a Member State of the European Communities.”,
|
|
| |
(i) in section 623 as respects an asset acquired on or after 15 February 2001 by the substitution for subsection (2) of the following:
|
|
| |
“(2) This section applies where—
|
|
| |
(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.”,
|
|
| |
(j) in section 624(5) by the substitution of “a company which is not resident in a Member State of the European Communities” for “a company resident outside the State”, and
|
|
| |
(k) in section 629(1) in the definition of “group” by the substitution of “a Member State of the European Communities” for “the State”.
|
|
| |
(2) (a) Except where the context otherwise requires and subject to paragraph (b), this section applies from 15 February 2001.
|
|
| |
(b) (i) Subsection (1) (f) applies in relation to cases in which—
|
|
| |
(I) either the disposal or acquisition is on or after 15 February 2001, or
|
|
| |
(II) both the disposal and acquisition are on or after that date.
|
|
| |
(ii) In a case to which subparagraph (i)(I) relates, any question of whether a company was, at the time of the acquisition or disposal corresponding to the disposal or acquisition referred to in that subparagraph, a member of a group shall be determined in accordance with section 616 as amended by subsection (1)(b).
|
