Tax Appeals Commission determination 78TACD2022 regarding Capital Gains Tax, 2022

• Administrative Decision Number: 78TACD2022
• Date: 16 May 2022
• Respondent: The Revenue Commissioners
• Subject Matter: Capital Gains Tax

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78TACD2022

Between

Appellant

and

The Revenue Commissioners

Respondent

Determination

Introduction

1. This is an appeal to the Tax Appeals Commission (“the Commission”) pursuant to and in

accordance with the provisions of section 949I of the Taxes Consolidation Act 1997 (“the

TCA 1997”) by (“the Appellant”)

against a Notice of Assessment to Capital Gains Tax (“CGT”) raised by the Revenue

Commissioners (“the Respondent”) in respect of in the

sum of €105,743.

2. On 6 June 2006, pursuant to a Court Order made on under the Family Law

(Divorce) Act 1996 (“the 1996 Act”), the deceased disposed of a property to an unrelated

third party for the sum of . The Appellant maintains that the Court Order was a

Property Adjustment Order and consequently, there is no liability to CGT by reason of the

provisions of section 1031(2) of the TCA 1997.

3. On 1 September 2014, the Appellant duly appealed to the Commission. The appeal

proceeded by way of a hearing on 06 May 2022.

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Background

4. On 27 April 2006, the Circuit Court, granted a between

the pursuant to section 5(1) of the 1996 Act and various

ancillary Orders (“the Order”). The Court granted inter alia the following ancillary Orders:-

“1. An Order that the property known as be sold.

2. An Order that the Respondent pay to the Applicant the sum €700,000.00

regardless of the price received for the above property, with the balance of

the proceeds of sale (net of costs of sale and tax liabilities) to be paid to the

respondent…….

5. An order that the parties Solicitors hereto have joint carriage of sale….

11. An order that each party be responsible for their own tax:….”

5. On 6 June 2006, pursuant to Order 1 of the aforementioned Order, the deceased entered

into a contract for the sale of (“the property”) with an unrelated third party, in the

amount of . The deceased’s Solicitor sought a CG50 Certificate pursuant to

section 980(8) of the TCA 1997 and the deceased was listed on the certificate as the sole

vendor of the property.

6. On 2 August 2013, the Respondent raised an assessment to CGT in respect of the sale

of the property, in the sum of €138,372. Following further representations, this amount

was reduced and the CGT currently at issue is €105,743. The deceased did not file a

return, as she maintained the effect of the Order was to transfer the beneficial interest in

the property to the deceased’s former spouse, who was responsible for the return and

payment of any CGT liability.

7. The Appellant maintains that the deceased’s estate has no liability to CGT by reason of

section 1031(2) of the TCA 1997 and the consequence of the Order, was to divest the

deceased’s beneficial interest in the property, in her former spouse.

8. The Respondent maintains that the provisions of section 1031 of the TCA 1997 are clear

and unambiguous and do not apply to the present circumstances. This is because the

section requires an asset to be disposed of by one spouse to another spouse, which has

not occurred. The deceased disposed of the property to an unrelated third party and not

her former spouse. The Respondent maintains that the terms of the Order do not transfer

the beneficial interest in the property, to the deceased’s former spouse.

9. It is important to note that prior to the hearing of the substantive appeal, the Appellant

argued that the Respondent was not permitted to raise the assessment, due to the