Case reference

Tax head

Legislation

Case stated requested

Matter under determination

127TACD2021

Capital gains tax

Section 535 TCA 1997
Section 536 TCA 1997
Section 604 TCA 1997

Unknown

This appeal relates to a CGT assessment raised in respect of the Appellant’s disposal of land under a CPO. The Appellant appealed the assessment on the basis that roll over relief (deferral of a capital gain) applied on the purchase of new property. The point at issue in the case was whether the CPO compensation was a capital sum derived from an asset that was lost or destroyed, as required under section 535(2)(a) TCA 1997. Revenue, as Respondents, also argued where the CPO proceeds were such it was not possible to apply roll over relief to restore an asset in advance of the sum being received, as section 536(2) TCA 1997 refers to restoring an asset within one year of receipt of the capital sum. The Appeal Commissioner considered the Appellant’s home and farmland to have been lost and damaged as a result of the CPO, reasoning that compensation for injury was included in the CPO contract. Revenue’s argument in relation to section 536(2) was also rejected on the basis that the new farm asset was acquired with knowledge of the impending CPO contract completion. On this basis, the Appellant was determined to be entitled to roll over relief on the CPO compensation.

128TACD2021

Income tax

Section 18 TCA 1997
Section 58 TCA 1997
Section 71 TCA 1997
Section 791 TCA 1997
Section 806 TCA 1997
Section 819 TCA 1997
Section 820 TCA 1997
Section 908 TCA 1997
Section 933 TCA 1997
Section 934 TCA 1997
Section 942 TCA 1997
Section 949AA TCA 1997
Section 949AC TCA 1997
Section 949H TCA 1997
Section 950 TCA 1997
Section 955 TCA 1997
Part 33, Chapter 1 TCA 1997
Part 39 TCA 1997
Part 40 TCA 1997
Part 41 TCA 1997

Yes

This complex appeal related to additional income tax assessments raised by Revenue, as respondents on the Appellant. The Appeal Commissioner considered:

• Whether some of the assessments, which related to the tax years 1987/88 to 2003 were out of time;
• Whether oral trusts had been created;
• The source of the funds settled in certain Jersey and Isle of Man trusts; and
• The tax residence and domicile of the Appellant during the appeal period.

On the basis that the Appellant was found to be the settlor of the trusts, and that he was tax resident and domiciled in Ireland at the material time, the Appeal Commissioner considered the application of section 806, which could entitle the Appellant to deduct certain management expenses incurred by the trustees. The Appeal Commissioner agreed with Revenue that the provisions of Case III Schedule D applied under section 71, on the basis that trusts were possessions of the Appellant, and therefore section 806 could not apply, as it operates when no other provisions apply to bring the individual within the liability to tax on a transfer of assets.
The Appeal Commissioner also found that the Appellant failed his own appeal and the prospect of having the assessment reduced due to insufficient evidence, of which the onus was on him to provide. Accordingly, the additional assessments for the tax years 1987/88 to 2003 were determined to stand.

129TACD2021 &130TACD2021

Income tax

Section 18 TCA 1997
Section 52 TCA 1997
Section 58 TCA 1997

Yes, but refused

Both appeals concern an amended notice of assessments raised against the Appellants for the years 2003 to 2014, following Revenue investigation. The substantive issue in both cases related to the fact that funds lodged in the Appellants’ accounts exceeded amounts declared for the relevant years, with no adequate explanation as to what the lodgements relate to. Owing to the fact that the Appellants were unable to provide any cogent evidence for the purpose of reducing or displacing the assessments, and the fact that there were no lodgements of substantial amounts of rental income, the Appeal Commissioner determined it to be inappropriate to reduce the assessment.

131TACD2021

PAYE, PREM, PRSI & USC

Section 19 TCA 1997
Section 112 TCA 1997
Section 117 TCA 1997
Section 118 TCA 1997

Yes

This appeal relates to notice of estimate for the tax years 2011 to 2016, concerning award payments to employees of the Appellant. The Appellant contended that payments to staff in the form of an award for successfully sitting and completing final professional exams were not chargeable to tax under section 112 TCA 1997, on the basis that the payments were not renumeration derived from “having or exercising an office or an employment”. It was said that the payments were a mark of personal recognition for an exceptional achievement. The Appeal Commissioner considered that while the payments may have been to mark the personal achievement of passing exams at the first sitting, it couldn’t be considered the sole motivation in making the payments. The Appeal Commissioner found that sitting and passing professional exams in a timely manner was a duty imposed on trainees within their contracts of employment. Accordingly, the Appeal Commissioner determined that the final exam awards were payments made to the Appellant’s employees arising from their employment, and were liable to tax under Schedule E in accordance with section 112(1) TCA 1997.

132TACD2021

CAT

Section 90–102 CATCA 2003

Unknown

This appeal concerns whether certain assets of a company were excepted assets for the purposes of calculating the Appellant’s entitlement to business relief. Revenue raised an amended assessment on the appellant in respect of a gift of shares from her father in 2012 assessing her to an additional CAT liability on the basis that cash in a company bank account, investments recorded as fixed assets and current assets on the company balance sheet and three properties were not assets used wholly or mainly for the purposes of the company’s supermarket trade throughout the two years prior to the share transfer. The Appeal Commissioner found that the excepted exclusions in section 100 CATCA sought to distinguish between assets and earnings of a business intended to be applied or re-invested in the business from those intended for non-business use. Owing to the facts presented the Appeal Commissioner was satisfied that the accumulation of assets and funds were for the purpose of the expansion of the business, and that accumulation began more than two years prior to the share transfer. In addition, the Appeal Commissioner found that properties rented to staff of the supermarket trade were not excepted assets owing to the long-standing expansion and upgrade project the company had engaged in and that the wording of section 100(2) CATCA implied that it was possible for an asset to be used for two purposes at the same time.

133TACD2021

CGT

Part 41 of TCA 1997
Section 955 TCA 1997
Section 956 TCA 1997

Unknown

This appeal concerns time limits for invoking an appeal under section 956 TCA 1997. The Appellant argued that a chain of correspondence with the Respondents, which commenced in 2013, encompassed more than a single appealable enquiry, and that a letter exercising his right to appeal had been submitted within 30-days of Revenue correspondence in September 2015. It was also contended that correspondence in 2013 and 2014 did not amount to the initiation of an enquiry under section 956. The Appeal Commissioner found the enquiry to have commenced in December 2014 and all subsequent requests were a continuation of the enquiry. On this basis, the statutory time period in which to make an appeal had expired by the time the Appellant submitted a letter to seek to exercise his right of appeal in September 2015.