Taxes Consolidation Act 1997 section 747FA

Offshore funds: amalgamations with investment undertakings

Section 747FA provides that where an offshore fund merges with an Irish investment undertaking under a scheme of amalgamation, the exchange of interests by investors is tax-neutral.

• A scheme of amalgamation arises where the assets of an offshore fund are transferred to an investment undertaking in exchange for units issued to each person with a material interest, in proportion to the value of that interest, after which the value of the original interest becomes negligible.
• Where a person disposes of a material interest in an offshore fund under such a scheme and receives units in an investment undertaking in return, the disposal does not give rise to a chargeable gain.
• The replacement units in the investment undertaking are treated as having been acquired at the same time and at the same cost as the original material interest in the offshore fund.
• The section was introduced by the Finance Act 2012 to facilitate cross-border mergers of UCITS funds under the UCITS IV Directive.