Taxes Consolidation Act 1997 section 632

Transfer of assets by company to its parent company

Section 632 provides for the deferral of capital gains tax where a subsidiary company transfers a trading asset to its parent company, which holds all of the securities representing the subsidiary's capital, and the parent is in another EU Member State.

• Where a subsidiary disposes of a trading asset used in its Irish trade to its parent company, and the parent immediately begins using the asset for its own Irish trade, the disposal is treated as giving rise to no gain and no loss for capital gains tax purposes.
• The relief works by treating both the subsidiary and the parent as if they were Irish resident, so that the intra-group transfer provisions of sections 617 to 619 apply to the disposal.
• The relief does not apply where the disposal forms part of a transfer to which section 631 applies, meaning that section 631 takes precedence where both sections could apply.
• The gain is not eliminated but deferred: it is effectively taken over by the parent company and will become chargeable when the parent eventually disposes of the asset.