(September 27. 2015)

On September 25, 2015 the Irish Revenue issued Revenue eBrief No. 96/15. Via the eBrief the Irish Revenue informs the public that Revenue Tax Manual Part 6.9.2 (Purchase of own shares by quoted company) has been updated including clarification that a share scheme arrangement put in place by a quoted company, under which the company decides to make a return of value to shareholders which gives a choice to a shareholder to take a payment out of the profits of the company by way of dividend or by way of share redemption does not satisfy the condition inserted by section 34 Finance Act 2010 for the purposes of the application of section 175 to the share redemption payment.

According to the eBrief such an arrangement can only be viewed as a scheme or arrangement the main purpose or one of the main purposes of which is to enable the owner of the shares to participate in the profits of the company without receiving a dividend. The eBrief continues by stating that for the purposes of the application of the condition imposed by section 34 Finance Act 2010 other issues that may occur at or around the time of the implementation of the optional share scheme, such as a reorganization of the ordinary share capital of the company, will not be factors that would influence the application of the condition.

Click here to be forwarded to the updated Part [6.9.2] Purchase of own shares by quoted company (section 175 TCA 1997).

Click here to Revenue eBrief No. 96/15 as published by the Irish Revenue on September 25, 2015.

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