Tax Appeals Commission determination 29TACD2023 regarding Income Tax, 2023

• Administrative Decision Number: 29TACD2023
• Year: 2023
• Date: 14 December 2022
• Subject Matter: Income Tax
• Respondent: THE REVENUE COMMISSIONERS

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29TACD2023

Between

Appellant

and

THE REVENUE COMMISSIONERS

Respondent

Determination

Introduction

1. This matter comes before the Tax Appeals Commission (hereinafter “the

Commission”) as an appeal against an assessment to income tax raised by the

Revenue Commissioners (“the Respondent”) on 13th November 2019.

2. The assessment covers the year 2014 and the income tax on the assessment amounts

to €34,606.36. The Appellant makes her appeal in accordance with the provisions of

section 933 (1) of the Taxes Consolidation Act 1997, (“the TCA”).

Background

3. The Appellant’s agent filed her 2014 income tax return on 9th November 2015. An

amended return to correct an error was subsequently filed on 16h November 2015.

4. Both of the 2014 income tax returns filed on behalf of the Appellant did not apply the

provisions of section 485C and section 485D TCA 1997 which are referred to as the

“High Income Earners Restriction” (“HIER”). The Finance Act 2006 introduced the

HIER and the effect of this provision is that it restricts the amount of certain “specified

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reliefs” that an individual can claim against their assessable income. These specified

reliefs are set out at Schedule 25B TCA 1997 and are annexed at Appendix 1 to this

determination.

5. The Respondent sent an audit notification letter to the Appellant on 20th November

2015, advising, amongst other things, that she provide a HIER computation for 2014

stating the reason for this request was that the “restriction appears to apply”.

6. The Appellant replied to this correspondence on 20th April 2016 stating that the “ROS

offline system suggests that High Earner restriction does not apply. See attached

screen-print” [provided].

7. Subsequent correspondence issued between the Appellant and the Respondent. In

the absence of the HIER computation being provided, the Respondent issued an

amended notice of assessment in the sum of €34,606.36 on 13th November 2019.

This calculation was derived by applying the HIER restriction to the Appellant’s

assessable income for 2014.

8. A Notice of Appeal dated 13th December 2019 against the Respondent’s assessment

was filed with the Commission.

9. The oral hearing took place before the Commissioner on 26th October 2022. The

Appellant was represented by her agent and the Respondent was represented by two

staff officials. The Commissioner had the benefit of written submissions from both

parties in advance of the hearing date.

Legislation

10. The legislation relevant to this appeal is as follows:

Section 485C TCA 1997 Interpretation (Chapter 2)

(1) In this Chapter and in Schedules 25B and 25C, except where the context otherwise

requires—

“adjusted income”, in relation to a tax year and an individual, means the amount

determined by the formula—

(T + S) − R

where—

T is the amount of the individual’s taxable income for the tax year determined on the

basis that—

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(a) this Chapter, other than section 485F, does not apply to the individual for

the tax year, and

(b) (i) if the individual, being a married person, is assessable to tax for the

tax year otherwise than under section 1016, the provisions under which

the individual is assessable are modified in accordance with paragraphs

(i) to (vi), but excluding paragraph (iia) of section 485FA,

(ii) if the individual, being a civil partner, is assessable to tax for the tax

year otherwise than under section 1031B, the provisions under which

the individual is assessable are modified in accordance with paragraphs

(i), (iia) and (vi) of section 485FA,

S is the aggregate of the specified reliefs for the tax year, and

R is the amount of the individual’s ring-fenced income, if any, for the tax year;

“aggregate of the specified reliefs”, in relation to a tax year and an individual, means

the aggregate of the amounts of specified reliefs used by the individual in respect of

the tax year;

“amount of specified relief”, in relation to a specified relief used by an individual in

respect of a tax year, but subject to subsection (1A), means the amount of the specified

relief used by the individual in respect of the tax year determined by reference to the

entry in column (3) of Schedule 25B opposite the reference to the specified relief

concerned in column (2) of that Schedule;

“excess relief”, in relation to a tax year and an individual, means the amount by which

the individual’s taxable income for the tax year determined in accordance with section

485E exceeds the amount that the individual’s taxable income for the tax year would

have been had this Chapter, other than section 485F, not applied to that individual for

that year;

“income threshold amount”, in relation to a tax year and an individual, means—

(a) €125,000, or

(b) in a case where the individual’s income for the tax year includes ring-fenced

income and his or her adjusted income for the tax year is less than

€400,000, the amount determined by the formula—

€125,000 x A

B