Tax Appeals Commission determination 74TACD2021 regarding USC, 2021

• Administrative Decision Number: 74TACD2021
• Year: 2021
• Date: 09 February 2021
• Respondent: THE REVENUE COMMISSIONERS

74TACD2021

Between/

Appellant

-and-

THE REVENUE COMMISSIONERS

Respondent

DETERMINATION

A. Matter under Appeal

1. These three appeals come before the Tax Appeals Commission as appeals against

Notices of Assessment raised by the Respondent for the tax years 2012, 2013 and

2014 in relation to the amount of Universal Social Charge (hereinafter “USC”)

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Property Relief Surcharge payable by the Appellant. The same issue arises in

relation to all three of the years under appeal.

2. The appeals proceeded by way of oral hearing before me during which I heard

legal submissions from Counsel for the Appellant and Counsel for the Respondent,

the facts relevant to the appeals not being in issue before me.

B. Facts relevant to the Appeal

3. As the material facts necessary to a determination of these appeals were

essentially the same in relation to all three years under appeal, I propose setting

forth the evidence before me in relation to 2012 only, that being the first of the

three years covered by the appeals.

4. The Appellant’s principal business activity is the operation of a nursing home and

he was jointly assessed with his wife for income tax purposes in the relevant

years.

5. The Appellant was subject to the High Income Earner Restriction (hereinafter “the

HIER”) in 2012 on the basis that:-

(a) he had adjusted income in excess of €125,000;

(b) he used Specified Reliefs in excess of €80,000, and

(c) the aggregate of the Specified Reliefs was greater than 20% of his adjusted

income.

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6. The Specified Reliefs that were used by the Appellant in 2012 totalled €1,517,112

and comprised the following:-

(a) Nursing Home building relief pursuant to section 268(1)(g) of the Taxes

Consolidation Act, 1997 (hereinafter “TCA 1997”) of €1,497,094; and,

(b) Carry forward of excess relief pursuant to section 485F of TCA 1997 of

€20,018.

7. The Appellant’s adjusted income was agreed by the parties as being €1,500,882

in 2012, having taken into account €16,230 of ring-fenced income, and was

calculated as follows:-

Adjusted Income = (T+S)-R

Where:

T = the Appellant’s taxable income, before the HIER, for the

relevant year

S = the aggregate amount of Specified Reliefs used by the

Appellant for the relevant year

R = Ring-fenced Income

8. This resulted in the Appellant’s adjusted income being calculated as follows:-

Adjusted income for 2012 = (€0 + €1,517,112) - €16,230 = €1,500,882

9. In calculating the HIER for the relevant years, the Appellant used the following

formula:-

Taxable income = T + (S – Y)

Where:

T = the Appellant’s taxable income, before the HIER, for the

relevant year