Tax Appeals Commission determination 63TACD2024 regarding Income Tax & VAT, 2024

• Administrative Decision Number: 63TACD2024
• Year: 2024
• Date: 25 March 2024
• Respondent: THE REVENUE COMMISSIONERS

1

63TACD2024

Between:

Appellant

and

THE REVENUE COMMISSIONERS

Respondent

_________________________________________________

Determination

_________________________________________________

2

Table of Contents

Introduction ......................................................................................................................................... 3

Background ......................................................................................................................................... 3

Legislation and Guidelines .............................................................................................................. 5

Section 19 of the TCA 1997 ........................................................................................................... 6

Section 20 of the TCA 1997 ........................................................................................................... 7

Section 112 of the TCA 1997 ......................................................................................................... 7

Section 130 of the TCA 1997 (as in force from 1 January 2011 to 30 December 2020) ...... 8

Section 548 of the TCA 1997 (as in force from 30 November 1997 to 24 December 2017)

.......................................................................................................................................................... 14

Witness and Expert Evidence ....................................................................................................... 15

Witness Evidence – ............................................................................... 15

Witness Evidence – ............................................................................ 19

Witness Evidence – ............................................................................... 20

Expert 1 – ................................................................................................. 21

Expert 2 – ........................................................................................................... 28

Appellant’s Submissions ............................................................................................................... 36

Respondent’s Submissions .......................................................................................................... 39

Material Facts .................................................................................................................................... 41

Whether a transfer of the goodwill of the sole trade business to the Company took place

on ............................................................................................................................. 44

What the appropriate valuation of the goodwill of the sole trade business was at

. ................................................................................................................................................ 46

Commissioners findings of material fact ..................................................................................... 52

Analysis .............................................................................................................................................. 54

Alternative Assessments ............................................................................................................... 56

CGT return 2012............................................................................................................................. 58

Schedule E assessments .............................................................................................................. 58

Schedule F assessments .............................................................................................................. 60

Determination .................................................................................................................................... 60

Notification......................................................................................................................................... 62

Appeal ................................................................................................................................................. 62

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Introduction

1. This is a consolidated appeal to the Tax Appeals Commission (hereinafter the

“Commission”) pursuant to and in accordance with the provisions of the Taxes

Consolidation Act 1997 (hereinafter the “TCA 1997”).

2. This appeal is brought by (hereinafter the “Appellant”) against

Notices of Amended Assessment to Income Tax for the years 2012, 2013, 2014, 2015 and

2016 raised by the Revenue Commissioners (hereinafter the “Respondent”).

3. The amount of tax in dispute in this appeal is €313,953.33.

4. A related determination has been issued in a related appeal

(hereinafter the “Company”) M160/18.

Background

5. The Appellant is a businessman who, between , carried on a sole

trade which traded as “ ” (hereinafter the “sole trade”), as

a

.

6. The Company was incorporated in and, at the time of its incorporation, had two

directors, the Appellant with a 99% shareholding and his wife with a 1% shareholding.

7. On the Appellant was registered as an employee of the Company.

8. On the Appellant transferred the sole trade business into the Company. The

transfer of the sole trade into the Company included a valuation for the goodwill of the sole

trade of €250,000.

9. In , the amount of €250,000 was credited to the Appellant’s director’s loan

account in the Company.

10. The director’s loan account was drawn down between and as

follows:

Year

Amount drawn down from director’s loan

account €

61,682.36

63,579.80