Ireland: Judge reserves decision in Revenue appeal of €57m O'Brien tax ruling
17 April 2013
Posted by: Author: Tim Healy
Source: Irish Independent
Businessman Denis O'Brien is fighting a Revenue Commissioners' bid to overturn a decision that he was not liable to pay €57m in tax in Ireland around the same time he started living in Portugal.
A Revenue Appeals Commissioner decided that Mr O'Brien's permanent home in 2000/2001 was Quinta de Lago, Almancil, Portugal, and not Ireland.
This meant he was not liable for capital gains tax (CGT) of €56.8m on the €285m he received for 5.7 million shares he owned in Esat Digifone when it was sold to British Telecom in 2000.
The Inspector of Taxes was unhappy with that decision and the Appeals Commissioner agreed to refer the matter to the High Court to determine whether he was wrong in law.
Yesterday, Ms Justice Mary Laffoy reserved her decision.
The court heard the case arose because of the purchase in 2000 by Mr O'Brien of a house on Raglan Road, in Ballsbridge, one of a number of Dublin 2/4 investment properties he had built up since the early 1990s.
It is a seven-bedroom detached period house which he bought through a company he controlled, Partenay Ltd.
The Revenue said that even though it accepted Mr O'Brien moved with his family to Portugal in February 2000, he also had a permanent and habitable home available to him at that time in Raglan Road.
In view of this, the Revenue said, the Appeals Commissioner should then have gone on to decide whether his personal and economic interests were closer to Ireland than to Portugal, thereby making him tax-liable here in accordance with the Ireland/Portugal Double Taxation Convention.
The court heard that Mr O'Brien employed a number of architectural and building experts to show that the property was not habitable at the time and needed extensive renovation, which was not completed until 2002. A builder and an engineer said parts of the house were dangerous.
Mr O'Brien argued that all the family's personal possessions were relocated to Portugal after they left their former home in Wellington Road in February 2000. That property was immediately rented out and no longer available to the family.