Paschal Donohoe (Dublin Central, Fine Gael)

I move amendment No. 46:

In page 61, to delete lines 38 and 39, and in page 62, to delete lines 1 to 22 and substitute the following: “ “(7B) (a) Where the trade consists of the carrying on of relevant activities (within the meaning of section 291A(5)(a))—

(i) the predecessor shall not be entitled to any relief under section 291A(6)(b)(i) in respect of an excess amount (within the meaning of section 291A(6)(b)(i)), or portion thereof, as the case may be, which relates to a specified intangible asset which transferred from the predecessor to the successor on the transfer of the trade (in this subsection referred to as ‘the transferable excess amount’), and the successor shall be entitled to relief under section 291A(6)(b)(i) in respect of the transferable excess amount, for which the predecessor would have been entitled to claim relief if the predecessor had continued to carry on the trade, and

(ii) the predecessor shall not be entitled to any relief under section 291A(6)(b)(ii) in respect of excess interest (within the meaning of section 291A(6)(b)(ii)), or portion thereof, as the case may be, which was incurred in connection with the provision of a specified intangible asset which transferred from the predecessor to the successor on the transfer of the trade (in this subsection referred to as ‘the transferable excess interest’), and the successor shall be entitled to relief under section 291A(6)(b) (ii) in respect of the transferable excess interest, for which the predecessor would have been entitled to claim relief if the predecessor had continued to carry on the trade.

(b) (i) For the purposes of subparagraph (i) of paragraph (a), where an excess amount referred to in that subparagraph relates to both—

(I) a specified intangible asset which transferred from the predecessor to the successor on the transfer of the trade, and

(II) a specified intangible asset which did not so transfer,

when determining the transferable excess amount, the excess amount shall be apportioned on a just and reasonable basis. (ii) For the purposes of subparagraph (ii) of paragraph (a), where excess interest referred to in that subparagraph was incurred in connection with both— (I) the provision of a specified intangible asset which transferred from the predecessor to the successor on the transfer of the trade, and (II) the provision of a specified intangible asset which did not so transfer, when determining the transferable excess interest, the excess interest shall be apportioned on a just and reasonable basis.”.

(2) Subsection (1) shall have effect for accounting periods commencing on or after 1 January 2026 in respect of a transfer of a trade to which section 400(5) of the Principal Act applies which occurs on or after 1 January 2026.”.

The background to this amendment is that section 400 of the Taxes Consolidation Act 1997 enables the transfer of certain tax attributes from a predecessor company to a successor company upon the transfer of a trade. Section 42 of the Finance Bill 2025 amends section 400 and provides that where excess allowances and excess interest of the predecessor company are carried forward, such amounts will transfer to the successor company provided all of the necessary conditions of section 400 are satisfied, including that the assets to which the excess allowances and excess interest relate are also transferred.

Following publication of the Finance Bill it was noted that the legislation does not specify how amounts carried forward are to be apportioned in cases where a predecessor company may have multiple assets that qualify for section 291A capital allowances and, upon the transfer of a trade, only some of the assets transfer to a successor company.

Therefore, I am bringing forward a Committee Stage amendment to provide that where some of the assets transfer from the predecessor company to the successor company and some of the assets do not, an apportionment of the excess amount or excess interest between assets which transferred and assets which have not transferred is required, and the apportionment is to be made on a just and reasonable basis.

A further minor drafting issue is also addressed in relation to the commencement provisions of the legislation. Following the amendment, the legislation will specify that the provisions apply for the accounting periods commencing on or after 1 January 2026 and in respect of a transfer of a trade which occurs on or after 1 January 2026. This will ensure that the legislation operates as intended.