Tax Appeals Commission determination 118TACD2021 regarding Income Tax, 2021

• Administrative Decision Number: 118TACD2021
• Date: 09 July 2021
• Subject Matter: Income Tax
• Respondent: THE REVENUE COMMISSIONERS

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118TACD2021

BETWEEN/

Appellant

V

THE REVENUE COMMISSIONERS

Respondent

DETERMINATION

Introduction

1. This is an appeal against assessments to the domicile levy under section 531AH Taxes

Consolidation Act 1997 (TCA 97) made on the Appellant in respect of the tax years

2011, 2012 and 2013 inclusive, on 10th August 2015. The Appellant appealed the

assessments made by letter dated 14th August 2015.

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2. The Appellant did not file domicile levy returns or pay domicile levy in respect of any

of the tax years in issue - 2011, 2012 and 2013 inclusive, having been requested to do

so by notice in writing dated 19th June 2015 (section 531AF(1A) TCA 1997).

3. The appeal was heard by remote oral hearing over 5 days on the following dates:

Day 1: April 2021

Day 2 April 2021

Day 3: May 2021

Day 4: May 2021

Day 5: June 2021

4. Prior to the hearing, the Appellant was challenging three issues relating to the

assessments.

These were:

i) the Appellant’s Agent contended that the Appellant, now deceased, had

world-wide income for each relevant tax year of not more than €1 million

worldwide, as “income” under section 531AA(1) TCA should be reduced to

take account of capital allowances;

ii) the Appellant asserted that his share of the profits in the

Hotel Partnership was not “Irish property” as defined and therefore the

Appellant did not meet the asset test (section 531AA(1) TCA);

iii) The Appellant did not meet the asset test (section 531AA(1) TCA) as his Irish

assets were less than €5M;

5. Following discussions between the parties, issue i) was dropped by the Appellant and

the only issues for decision put before me at the hearing were ii) and iii) above.

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Page

CONTENTS

1-2

Introduction

3

Contents

3-4

Background

5

Legislation

5-6

Irish Case Law relied upon

6

UK Case Law relied upon

6

Other Authorities relied upon

6-7

Witness Testimony

7-9

Valuation Experts’ methodologies

9

Material Findings of Fact

Submissions

10-17

Appellant

17-24

Respondent

24-41

Analysis & Conclusions

40-41

Determination

42-45

Appendices

Background

6. The Appellant is and always has been Irish tax resident and Irish tax domiciled.

7. The business and the hotel, known in 2011-2013 as the Hotel

Partnership, had in earlier years been acquired and developed by the Appellant in his

sole name. The Appellant expanded the hotel in 2006, spending €20million on the

property, financed by bank borrowings.

8. On 1 December 2006, the Appellant entered into the Hotel Partnership

with his two sons, at which time he gifted 2.5% of his interest of the business and hotel

to each son.