Tax Appeals Commission determinations

Section 544 TCA 1997

Section 545 TCA 1997

Section 552 TCA 1997

Section 554 TCA 1997

Section 555 TCA 1997

Section 557 TCA 1997

Section 560 TCA 1997

Section 561 TCA 1997

• The Appellant in this case was a partner in a partnership which had acquired land in 2009.
• The partnership built and developed a property at a total cost of €23,023,400 which included integrated plant and machinery at a cost of €5,506,195. The plant and machinery qualified in full for capital allowances and the Appellant claimed his proportionate share of the available capital allowances on his income tax returns.
• Over the period of ownership of the asset, there had been a part disposal and further capital additions leaving a base cost of €19,642,020. The partnership subsequently sold the property to a third party for €20 million; there was no apportionment of the sale price specified in the contract between land and plant and machinery. The property was used solely for the purposes of a trade or profession for the entire period of ownership.
• The Appellant completed a capital gains tax (CGT) return based on a disposal of a single asset being the land which included the buildings thereon and fixtures therein. The Appellant contended that the qualifying expenditure on plant and machinery was part of the acquisition cost and is an allowable deduction for the purposes of section 552(1).
• Revenue issued one CG50 clearance for the sale of the land and buildings including the integrated plant and machinery.
• Revenue submitted that the single asset sold consisted of two distinct elements from a tax perspective. One element was the plant and buildings which had qualified for capital allowances over the period of ownership and the second element being land which had not attracted capital allowances. Revenue stated that as the asset sold comprised of two different types of assets for tax purposes, separate CGT computations were required, and an apportionment was required under section 544 TCA to calculate the capital gain. Revenue argued that the loss accruing on the plant and machinery could not be factored in to reduce the capital gain. It was on this basis that Revenue had issued a notice of amended assessment.
• The Appellant submitted that when land is sold to a purchaser which necessarily includes all buildings and fixtures and fittings that are integrated into the building, they are an integral part of the building. The Appellant argued that he was therefore entitled to deduct qualifying expenditure on plant and machinery in the CGT calculation.
• The Appeals Commission held that the method adopted by Revenue was not provided for in Statute and therefore was incorrect. 

Section 884 TCA 1997

Section 917 TCA 1997

Section 949 TCA 1997

Section 959 TCA 1997

Section 1077 TCA 1997

Section 1084 TCA 1997

• The Appellant filed corporation tax returns (Form CT1) for the accounting periods 2021 and 2022 by June 2022 and April 2023 respectively and Notices of Assessment were issued by Revenue.
• The Appellant’s agent encountered IT filing acceptance issues when filing the iXBRL accounts and unknowingly the accounts did not file properly.
• In 2024, Revenue issued revised Notices of Assessments in respect of both years to include a surcharge for late submission of returns. This was on the basis that iXBRL accounts were not filed by the specified date.
• The Appellant only became aware on receipt of the revised Notice of Assessments that iXBRL accounts had not been filed.
• Revenue has issued tax clearance certificates for all years 2021 to 2024 prior to the issue of amended assessments.
• The Appellant argued that the non-filing of electronic accounts was not intended or deliberate, there was no loss to Revenue and that all taxes were paid on time. Once becoming aware of the issue, there was no unreasonable delay in remedying the matter and accounts were filed within a few days.
• Revenue stated the Appellant did not provide correspondence at the time of filing the iXBRL accounts for the accounting periods 2021 or 2022 of the technical difficulties encountered.
• The Appeals Commission held that Revenue correctly applied a surcharge under section 1084(2)(a)(ii) for failing to deliver a return on or before the specified return date.
• The Appeals Commission held that Revenue correctly applied a surcharge under section 1084(2)(a)(ii) for failing to deliver a return on or before the specified return date.