Tax Appeals Commission Determinations
Published 15 April 2021–17 May 2021
Case reference |
Tax head |
Legislation |
Case stated requested |
Matter under determination |
Income tax |
Unknown |
Despite the extenuating circumstances of the Appellant, the Appeal Commissioner determined that the wording of section 865(4) does not provide for circumstances in which the 4-year rule for making a valid claim for repayment might be mitigated and accordingly the repayment claim for the tax year of assessment 2009 made in 2017 was determined to be out of time. |
||
Income tax |
Unknown |
This appeal concerns amended notices of assessment to income tax for the tax years 1997/98, 1998/99, 1999/00 and 2000/01. The facts relevant to the case involve a commission sharing relationship between Irish, Isle of Man and Jersey resident companies, significant Revenue investigation and a voluntary disclosure. The Appellant made a preliminary argument that the assessments were time barred, as they were made outside the 4-year time limit, and there was no question of fraud or neglect. The Appeal Commissioner determined the voluntary disclosure demonstrated that the Appellant neglected to provide a full and true disclosure in his returns and so Revenue were entitled to amend the assessments for the periods concerned. On the substantive issue in the case that the amounts assessed were without foundation, the Appeal Commissioner accepted the evidence of the Appellant and determined the Appellant to have been overcharged. |
||
Income tax & USC |
Unknown |
This appeal concerned the deduction of a tax-free pension lump sum in the calculation of a standard capital superannuation benefit tax exempt calculation. The Appeal Commissioner determined that the future right to the tax-free pension lump sum was correctly deducted in arriving at the Appellants tax free redundancy payment and tax was correctly applied on the excess redundancy payment. |
||
Domicile levy |
Section 1 TCA 1997 |
Unknown |
This appeal concerns notices of assessment to the domicile levy for the years 2010 and 2011. The three main issues put forward by the Appellant concerned the statutory interpretation of domestic legislation; the application of the UK/Ireland DTA; and the impact of domestic legislation on the right to free movement of capital. The Appeal Commissioner, in analysing the relevant legislation, determined that the income levy and USC paid by the Appellant should not be considered when deciding if his income tax liability in the State was less than €200,000. The Appeal Commissioner determined that UK income tax payable by the Appellant should be considered for calculating his “liability to income tax” for the purposes of determining if he is a “relevant individual” under section 531AA and the provisions of Article 21(1)(a) of the UK/Ireland DTA do not afford a credit for UK tax paid against the liability to the domicile levy. It was further determined that the treatment of the Appellants UK rental income was not a breach of his TFEU right to free movement of capital. Accordingly, the notices of assessment to the domicile levy were determined to stand. |
|
CGT |
Unknown |
In appealing an amended notice of assessment to CGT for 2013, the Appellant contended that for land sold pursuant to a compulsory purchase order, the date of disposal was a date such that the 20 percent CGT rate could be applied on the chargeable gain. The Appeal Commissioner considered the interpretation of two phrases in section 542(1)(c) – “an authority possessing compulsory purchase powers” and “the time at which the authority enters on the land in pursuance of its powers” – in determining the date of disposal to fall after 6 December 2012, such that the 33 percent rate of CGT applied to the chargeable gain of the Appellant. |
||
CGT |
Section 532 TCA 1997 |
Unknown |
The matter under appeal in this case relates to the refusal by Revenue to allow a claim under section 538(2) TCA 1997 for a capital loss made on a loan as a consequence of it having been disposed of at negligible value. The loan agreement provided for the conversion of the loan into shares in a particular company. The Tax Appeal Commissioner found in favour of the Appellant that the loan transaction was a debt on security within the meaning of section 585 TCA 1997 and that the loss was an allowable capital loss under section 538. |
|
PAYE/USC |
Unknown |
This Appeal concerns a lump sum payment received by the Appellant in 2018 for monies due for the years 2015 through 2017 under an income continuance plan. Considering the wording of section 112(3) TCA 1997 the Appeal Commissioner determined that despite the entitlement to receive payments dating back to earlier years, the payment made in 2018 falls to be taxed in the year it was paid. |
||
Income tax |
Section 3 TCA 1997 |
Yes |
The primary issue in this appeal concerns the disallowance of trading losses claimed by the Appellant on the basis that he was not carrying on a trade of land development for the years of assessment 2005 to 2015. The Appeal Commissioner considered whether a trade of land development begins when the developer purchases land for development if that land was zoned for agricultural use at the time and planning permission is not obtained or sought over a prolonged period of time. In considering the judgment in O’Farrell the Appeal Commissioner determined that in the absence of planning permission in circumstances where the land was zoned agricultural and required a change of use, no development could lawfully proceed since the land had been purchased and that the Appellant was not conducting a trade of land development during the years concerned and was not entitled to claim trading losses. |
|
PAYE |
Section 126 TCA 1997 |
Unknown |
This is an appeal against amended P21 assessments to income tax on a taxpayer who was jointly assessed. The Appellant received a contributory pension pursuant to section 108 of the Social Welfare Consolidation Act 2005 which increased because the Appellant’s spouse is a “qualified adult” within the meaning of the Act. The Appellant contended that the increase in his contributory State pension was attributable to his spouse and that it should be taxed as her income with the benefit of the PAYE tax credit and the transferable amount taxed at 20 percent. Revenue contended that the PAYE tax credit and increased standard rate cut off point was only available for the private pension earned by the Appellant’s spouse. Owing to the wording of section 126(2B) TCA 1997 the Appeal Commissioner determined the increase in the Appellant’s state pension was deemed to be his income, rather than that of his wife and the amended P21 Balancing Statement was determined to stand. |
|
VAT |
Section 2 VATCA 2010 |
Yes |
This appeal considers whether the Appellant has a right to deduct VAT charged on costs incurred on the acquisition of the revisionary interest in properties, i.e., purchase of the freehold or long leasehold interest in properties which were subject to existing leases granted in favour of tenants who were in occupation. The Appellant invariably exercised the option to tax and charged VAT on leases where the option was available. The Appeal Commissioner in consideration of CJEU principles found the Appellant to have a right to deduct input VAT if there is a direct and immediate link between an input transaction and an output transaction or if there is a direct and immediate link with a taxable economic activity as a whole. The Appeal Commissioner found the acquisition of the revisionary interest in the properties to be connected with, and necessary for, the economic activity of the Appellant and was satisfied that an objective link existed between the costs incurred on the acquisition and the economic activity of the Appellant in exploiting tangible property for income, which gave rise to a right to a deduction of the VAT charged on the acquisition costs in full. |
|
Income tax & VAT |
Section 16 VATA 1972 |
Unknown |
The Appellant in this case contended that calculations by Revenue for amended Notices of Assessment to VAT and income tax following an audit of the Appellants trade as a publican were “theoretical, mathematical and hypothetical”. The Appeal Commissioner considered the estimation method used by Revenue to be fair, reasonable, and appropriate, but in order to be accurate and robust it must consider the purchases that were actually sold. Owing to the evidence provided by the Appellant, the Appeal Commissioner reduced the amounts under assessment due to exceptional stock loss. |
|
USC |
Section 485C TCA 1997 |
Unknown |
The Appellant contended that he should not have been subject to the USC Surcharge on the element of property reliefs he was precluded from using due to the Higher Income Earner Restriction. The Appeal Commissioner found that for the purposes of section 531AAE (USC Surcharge), an amount of specified property relief will have been given full effect and will have been used by a taxpayer in a tax year if that taxpayer has sufficient chargeable gains or profits to absorb the reliefs as claimed. On the basis that the Appellant had sufficient chargeable gains or profits to absorb the specified property reliefs claimed by him during the years under appeal and the fact that those reliefs were used by him and given full effect within the meaning of section 531AAE, the Appellant was determined not to have been overcharged. |
|
CGT |
Section 5 TCA 1997 |
Yes |
The core issue of this appeal concerns whether a non-resident company came within the charge to CGT for the chargeable gains assessed on the disposal of shares by the Appellant. Revenue contended that the shares concerned derived their value or the greater part of their value directly or indirectly from land in the State. The Appeal Commissioner found that “land” for the purposes of section 29(3)(a) TCA 1997 means a freehold or leasehold estate in land or one of the lesser interests in land formerly recognised by the common law, as now included in section 11(4) of the Land and Conveyancing Reform Act 2009. The Appeal Commissioner determined that the value of the shares disposed of by the non-resident company derived their value from the non-exclusive contractual licence to use land for the duration of a PPP contract. As the shares disposed of did not derive their value or the greater part of their value directly or indirectly from land in the State the Appellant was found not to come within the charge to Irish CGT on the disposal of the shares concerned. |
|
Corporation tax |
No |
This appeal required the Appeal Commissioner to determine whether the business of the Appellant consists of or includes the carrying on of a profession or the provision of professional services, such that a surcharge on the undistributed income of a service company applied under section 441. The Appellant was a company with academics involved in the area of consulting with extensive ties with the consulting industry. Revenue as respondents argued that the company was a management consultancy firm providing professional services. Evidence was provided that there is no clear framework of academic qualification to practice as a management consultant, no standard qualification, nor requirement to be a member of a professional body and it is unregulated and there is no regulatory body for management consultants. The Appeal Commissioner set out his understanding of the word “profession” noting the need for some form of regulatory control over those engaged in the profession. It was determined that the company was not engaged in a “profession” or in the “provision of professional services” as envisaged by section 441 TCA and to impose a liability pursuant to that section would be an “unfair imposition of liability by the use of oblique or slack language”. |
||
Income tax |
Unknown |
This appeal concerns an assessment related to the non-declaration of maintenance payments received by the Appellant from her former spouse. On the basis that the arrangement between the Appellant and her former spouse amounted to a voluntary arrangement rather than a legally enforceable obligation, the Appeal Commissioner determined no income tax liability arose on the receipt of the sums involved. |
||
Income tax |
Yes |
This appeal concerns whether an oral agreement to pay maintenance is enforceable for the purposes of section 1025 TCA 1997. The Appeal Commissioner considered the language of section 1025 to clearly contemplate more than just an instrument in writing or a court order but considered the legal requirements for creating a binding contractual obligation, whether written or oral. Owing to insufficient evidence of the legal enforceability of the arrangements between the Appellant and his former spouse, the Appeal Commissioner determined the assessment for the withdrawal of the claim for relief in respect of maintenance payments to stand. |
