Taxes Consolidation Act 1997 section 605

Disposals to authority possessing compulsory purchase powers

Section 605 provides rollover relief from capital gains tax where property situated in the State was compulsorily acquired before 4 December 2002 and the proceeds were reinvested in replacement property of the same class.

• Where the full disposal proceeds were reinvested in replacement assets of the same class, the original and replacement assets are treated as the same asset, preserving the original base cost and acquisition date.
• Where only part of the proceeds was reinvested, the amount not reinvested is treated as a part disposal of the original assets; where more than the proceeds was spent, the excess is treated as the cost of a new portion of the replacement assets.
• The replacement assets must be acquired, or an unconditional contract entered into, within the period beginning 12 months before and ending 3 years after the disposal, though Revenue may extend this window by written notice.
• Assets must fall within the same class: Class 1 covers trade assets (plant and machinery, trade land and buildings, and goodwill), while Class 2 covers non-trade land and buildings other than a principal private residence qualifying under section 604.