Earn-outs and share for share transactions
03/05/1988
Query
Does an earn-out which consists of shares qualify for relief under S.586?
Decision
Where part of the consideration for a takeover consists of shares or securities to be issued at a future date if a contingency is satisfied, the earn out element will be treated as a security and relief under S.586 may be due. This will apply only insofar as the earn-out element does not or could not take the form of cash.
Capital Gains Tax
Section 586, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:G.111(A)