Taxes Consolidation Act 1997 section 177

Conditions as to residence and period of ownership

Section 177 sets out the residence and ownership conditions that a shareholder must satisfy for a company's buy-back of its own shares to be treated as a capital gains tax disposal rather than a distribution.

• The shareholder must be resident and ordinarily resident in Ireland for the tax year in which the buy-back takes place, and any nominee holding the shares must also be so resident.
• The shares must have been owned by the shareholder for at least 5 years ending on the date of the buy-back, reduced to 3 years where the shares were appropriated under an approved profit-sharing scheme or were inherited.
• Periods of ownership by a spouse or civil partner (where they were living together) and by a deceased previous owner count towards the minimum ownership period.
• Where shares of the same class were acquired at different times, shares bought back by the company are matched with the earliest acquisitions first, while other disposals are matched with the latest acquisitions.