Taxes Consolidation Act 1997 section 579E

Trustees ceasing to be liable to Irish tax

Section 579E provides for a deemed disposal and reacquisition of trust assets at market value where trustees of an Irish-resident settlement become treated as resident in another territory under a double taxation treaty, and as not liable to Irish capital gains tax on disposals of those assets.

• Where trustees, while remaining Irish resident and ordinarily resident, become regarded under a tax treaty as resident outside Ireland and not liable to Irish CGT on disposals of specified trust assets ("relevant assets"), those assets are deemed to have been disposed of and immediately reacquired at market value immediately before the change takes effect.
• This deemed disposal rule applies where the change in treaty residence status occurs on or after 11 February 1999.
• Rollover relief under section 597 does not apply where new replacement assets acquired by the trustees would, because of a treaty, escape an Irish CGT charge on a subsequent disposal.
• Where a chargeable gain has been deferred under section 597 and would otherwise crystallise after the trust ceases to be within the charge to Irish CGT by reason of treaty provisions, the deferred gain is treated as accruing immediately before the time the treaty protection takes effect.