Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

This amendment relates to a taxation matter and is designed to avoid a potential anomaly in the treatment of capital gains tax on the proceeds from any future sale of Bord Gáis Energy. Under existing tax rules the pre-sale transfer of the energy assets by BGE into a subsidiary known as the energy company, as provided for in the Gas Regulation Bill 2013 will automatically be subject to relief from capital gains tax under section 617, the group relief provision of the Taxes Consolidation Act 1997. However, when the subsidiary is subsequently sold a de-grouping charge is automatically triggered under section 623 of the Taxes Consolidation Act 1997 with the capital gains tax liability falling on the subsidiary at the point of sale completion rather than on BGE. This essentially means that the capital gains liability would fall on the purchaser rather than on the seller, which would be unusual. This amendment is structured specifically to dis-apply the group relief provision for any pre-sale restructuring to provide absolute clarity that BGE will be liable for all capital gains tax relating to the restructuring of the energy business. This would provide clarity for all parties to any future sale and ensure that the appropriate capital gains tax is paid to the Revenue Commissioners. My Department consulted with the Department of Finance and the Office of the Attorney General on the drafting of this amendment and I am satisfied that this ensures the best outcome for the Exchequer.

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