Tax Appeals Commission determination 136TACD2022 regarding CAT, 2022

• Administrative Decision Number: 136TACD2022
• Date: 27 July 2022
• Subject Matter: CAT
• Respondent: The Revenue Commissioners

1

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”) brought on behalf of (“the Appellant”) against a Notice of

Amended Assessment to Capital Gains Tax dated 1 October 2018, issued by the Revenue

Commissioners (“the Respondent”) in relation to the period 1 September 2015 to 31

August 2016 in the sum of €692,010.

2. On 30 September 2015, the Appellant received a gift of a residential property at

with a market value of € from

(“the Disponer”). The Appellant is the adult son of the Disponer and he took

an absolute interest in the property.

3. This appeal relates to the question of the availability of an exemption in accordance with

section 86 of the Capital Acquisitions Tax Consolidation Act 2003 (“CATCA 2003”)

commonly referred to as ‘”dwelling-house exemption”. The matter at issue in this appeal

relates to whether the Appellant was, at the date of the gift of the

136TACD2022

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property, beneficially entitled to any other dwelling-house or to any interest in any other

dwelling-house in accordance with section 86(3)(b) CATCA 2003.

4. The Appellant filed an IT38 form claiming a dwelling house exemption in respect of the gift

of the property. The Respondent, in disallowing the claim for an

exemption, raised a Notice of Amended Assessment to CAT on 1 October 2018.

5. On 30 October 2018, the Appellant duly appealed to the Commission. On 4 July 2022, a

hearing of the appeal took place and the Commissioner heard submissions from Counsel

on behalf of the Appellant and the Respondent. The Commissioner appreciated the

extensive preparation by both parties and the bundle of documents and authorities

submitted.

Background

6. On 30 September 2015, the Appellant was gifted the property from the

Disponer and the Appellant claimed dwelling house exemption pursuant to section 86(3)

CATCA 2003. The Appellant had taken up residence in the property in

January 2012.

7. Previously, the Appellant had purchased a dwelling on 1 July 2004, at

”). On 28

March 2013, the Appellant disposed of the property to (“the

Company”) for the sum of €165,000, the market value of the property. The Company paid

the sum of €165,000 to the Appellant and the Company received the property

by way of consideration. The Company is a property holding/rental company involved in

the letting of residential and commercial properties. The Appellant is a 33% shareholder

in the Company, with his two brothers also being shareholders. The Appellant is not a

Director of the Company.

8. The Appellant maintains that he has no beneficial interest in the property and

therefore satisfies the provisions of section 86(3)(b) CATCA 2003, such that a dwelling

house exemption should have been afforded to him by the Respondent. He argues that

section 43 CATCA 2003 has no application to the circumstances of his appeal and any

beneficial interest he had in the property, ceased on the sale of the property to

the Company for market value. The Appellant asserts that the fundamental principles of

company Law support this approach.

9. The Respondent argues that “while the general law takes a certain approach to the assets

of estates and companies, the CAT rules, on the other hand, include extensive look

through provisions with respect to companies. These rules contained in Section 43 CATCA