Taxes Consolidation Act 1997 section 631

Transfer of assets generally

Section 631 provides relief from corporation tax and capital gains tax where a company transfers a trade carried on in Ireland to another EU-resident company in return for securities in that company.

• Where a company transfers all or part of an Irish trade to another EU company in return for shares or debentures, the transfer does not give rise to a balancing allowance or charge, and the receiving company inherits the transferor's unused capital allowances as if it had always carried on the trade.
• The transfer is not treated as a disposal for capital gains tax purposes; the receiving company is treated as having acquired the assets at the original cost and date of acquisition of the transferring company.
• If the transferor disposes of the securities received within six years, the allowable cost of each security is reduced by its apportioned share of the deferred gain; if disposed of after six years, the cost is taken as the market value of the assets at the date of transfer.
• The reliefs do not apply where the receiving company does not use the assets for an Irish trade, would not be chargeable on a gain on disposal, is exempt under a double tax treaty, or where both companies jointly elect in writing to disapply the reliefs.