Taxes Consolidation Act 1997 section 620A

Deemed disposal in certain circumstances

Section 620A provides for an exit charge where an asset that previously benefited from group relief ceases to be a chargeable asset, either by leaving the State or by shares ceasing to derive their value mainly from Irish land, minerals or exploration assets.

• Where an asset ceases to be chargeable because it moves outside the State or because shares no longer derive the greater part of their value from Irish land, buildings, minerals or exploration assets, an exit charge arises.
• The exit charge applies only where the company originally acquired the asset under a group reconstruction or amalgamation (section 615), a transfer of fixed assets within a group (section 617), or as replacement assets qualifying for group rollover relief (section 620).
• The company is deemed to have disposed of the asset immediately before it ceased to be chargeable and to have immediately reacquired it, both at market value at that time.
• This deemed disposal and reacquisition triggers a capital gains tax or corporation tax charge on any gain that has accrued while the asset was within the charge to tax.