Taxes Consolidation Act 1997 section 739K

Interpretation

Section 739K sets out the definitions and interpretation rules for Chapter 1B, which governs the taxation of Irish Real Estate Funds (IREFs).

• An IREF is an investment undertaking (or sub-fund) where 25% or more of the asset value derives from Irish real estate assets, or whose main purpose is to acquire such assets or carry on an IREF business; IREF assets include Irish land, REIT shares, specified mortgages and units in another IREF.
• An IREF taxable event is any means by which the value of IREF profits passes to the unit holder, including distributions, unit redemptions, unit exchanges, bonus unit issues, the IREF ceasing to be an IREF, unit disposals and the transfer of rights to accrued profits without transferring the underlying units.
• IREF withholding tax of 20% applies to the IREF taxable amount on the happening of an IREF taxable event; a specified person (broadly, a unit holder exempt from exit tax under Chapter 1A, excluding pension schemes, investment undertakings, life companies, credit unions and charities that hold a valid declaration) is outside the charge.
• Anti-avoidance rules require that artificial arrangements designed to manipulate the proportion of IREF assets are disregarded, and the gross value of assets must be used in the 25% calculation.