Taxes Consolidation Act 1997 section 49

Exemption of certain securities

Section 49 provides for a tax exemption on certain government-related securities where they are beneficially owned by persons not resident in the State, while denying that exemption where the securities are held through an Irish branch of a foreign financial company.

• Certain securities issued under the direction of the Minister for Finance (covering semi-State bodies, State-guaranteed securities, European bodies, World Bank securities, and securitisation bodies) may be issued with a condition that both the capital and the interest are exempt from tax, provided the beneficial owner is not resident in Ireland.
• The exemption does not apply where the securities are acquired after 15 May 1992 by a company and held by or for an Irish branch or agency of that company, where the branch carries on a financial trade or business — such as banking, general insurance, or life assurance.
• If the foreign company holds the securities separately from its Irish branch or agency (rather than the branch holding them), the exemption continues to apply.
• Whether a trade is a "financial" trade is determined by asking whether, in the absence of the exemption, the income from the securities would be taxable under Schedule D Case I, Case IV, or under section 726 (life assurance). The Case IV restriction applies only to interest and profits accruing on or after 21 April 1997.