Tax Appeals Commission determination 01TACD2022 regarding Income Tax, 2022

Administrative Decision Number01TACD2022
Date29 October 2021
Subject MatterIncome Tax
1. This is an appeal against amended assessments to income tax against the Appellant for
the tax years 2012 and 2013, dated 25th June 2015. The additional income tax liabilities
for 2012 and 2013 are 65,032 and €29,907 respectively. The Appellant appealed both
amended assessments.
2. The Appellant, a general medical practitioner, asserted that he transferred his medical
practice to an unlimited company, , (the Company) in November 2011 for a
consideration of €416,773. However the Respondent disagreed that such a transfer
took place and raised amended assessments on the basis that no legally effective
transfer of the business took place in 2011, and, therefore, that the General Medical
Scheme (GMS) income from patients under the contract with the Health Services
Executive (HSE) remained personal to the Appellant as his share of the partnership
income for the years 2012 and 2013 and should be directly assessed on the him.
3. The issue to be decided in this appeal is whether the Appellant should be assessed
personally on the income derived from his contract with the HSE on the provision of
GMS services to medical card patients or whether such income was properly assessed on
the Company.
4. The charge to tax under Schedule D is governed by TCA, section 18(1) and relates to:
"(a) the annual profits or gains arising or accruing to
(i) any person residing in the State from any kind of property whatever, whether
situate in the State or elsewhere,
(ii) any person residing in the State from any trade, profession, or employment,
whether carried on in the State or elsewhere,
(iii) any person, whether a citizen of Ireland or not, although not resident in the
State, from any property whatever in the State, or from any trade, profession
or employment exercised in the State, and
(iv) any person, whether a citizen of Ireland or not, although not resident in the
State, from the sale of any goods, wares or merchandise manufactured or
partly manufactured by such person in the State, …"
5. TCA, section 52 TCA identifies the person chargeable to tax and states:
"Income tax under Schedule D shall be charged on and paid by the persons ...
receiving or entitled to the income in respect of which tax under that Schedule is
directed in the Income Tax Acts to be charged."
Material findings of Fact
The Appellant
6. Based on the Appellant’s evidence, I have made the following material findings of fact:
(a) After graduating from medical school in , he worked in various hospitals in
the UK, New Zealand and the Channel Islands, before returning to the to train
as a general practitioner.
(b) He moved to Ireland in 20 and worked for several months in a GP practice. He
is a specialist General Practitioner and is registered with the Irish Medical Council.
Later in 20 , he was employed by in a GP practice as a salaried
doctor. After a year in that practice, he was offered and accepted the opportunity of
working in a partnership with . As such the Appellant cou ld either buy into the
practice at cost of €220,000 to €250,000 or by working additional hours for a period
of 4 years until he worked up parity. He chose the latter and commenced in
partnership with 1st January 20 . A partnership agreement was executed
and provided for the manner in which the parties would conduct their affairs. The
partnership also rented the premises from and his wife.
(c) Thereafter he applied for and obtained a new GMS number with the HSE to become
entitled to treat medical card patients from the HSE panel. As it was a new panel, the
Appellant started with no patients but built up a patient list over the years.
(d) The Appellant signed an agreement with the HSE on 14th April 20 . The following
provisions are relevant:
"The medical practitioner shall provide services or arrange for the provision of
services in accordance with these terms and conditions in the schedule to this
agreement to persons entitled to services under Section 58 of the Act.
I undertake, as long as the agreement is in force, not to change my places of
attendance or days or hours of attendance so as to materially affect the convenience
of my patients in the area in which I am practising on entering into the agreement or
to reside beyond reasonable access to the places of attendance listed above."
The number of patients whose names may be placed on the list of the practitioner, or
in the case of a practitioner who has agreements with two or more Health Boards,
the total of the numbers which may replace on the lists for those Boards shall not
exceed 2,000, save for the Board or the Boards, in exceptional circumstances, after
consultation with the IMO, decide to apply a higher limit."
(e) All of the income paid by the HSE in respect of the Appellant’s patients was paid into
the partnership bank account.

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