Taxes Consolidation Act 1997 Schedule 18A paragraph 1

Application and construction of Schedule - Pre-entry losses

Paragraph 1 of Schedule 18A sets out the definitions and construction rules for the Schedule, which restricts the use of allowable capital losses that a company brings into a group of companies (pre-entry losses).

• A pre-entry loss is either an allowable loss that accrued before the company joined the group, or the pre-entry proportion of a loss arising on disposal of a pre-entry asset after joining the group.
• A pre-entry asset is an asset held by a company immediately before the "relevant event" occurred — generally when the company joined the group, or when a non-resident company first came within the charge to Irish tax on the asset.
• Where the principal company of one group joins another group so that the two groups merge, the members of the first group are treated as joining the enlarged group at that time, unless the merger is simply a group reconstruction with the same underlying ownership.
• If the value of a later asset derives from a pre-entry asset (e.g. a freehold derived from a leasehold), the later asset is also treated as a pre-entry asset; and deemed disposal rules for life assurance funds and collective investment undertakings are applied without regard to the spreading provisions.