Tax appeal has implications for many, court told
AN appeal over the Revenue Commissioner's powers to tackle "aggressive" tax avoidance schemes has implications for many similar cases, the Supreme Court heard.
Denis McDonald SC, for the Revenue, said it was very anxious for a priority hearing of the case taken by businessman Ronan McNamee, Temple Road, Dartry.
The High Court previously rejected his challenge to a Revenue opinion that certain transactions in which he and his wife engaged in 2007 were for tax avoidance.
The transactions were option strategies involving Irish government gilts and foreign exchange finance instruments, known as "straddles".
The tax advantage for the McNamees of the straddles meant they avoided paying some €5.12m in Capital Gains Tax, plus a €1.12m surcharge.
The High Court decision has implications for 26 people involved in similar transactions with the total amount of recoverable tax estimated at up to €110m.
Yesterday, Mr McDonald said Mr McNamee's case not only affected a number of other cases brought by wealthy individuals over similar notices but has implications for several recently initiated judicial review cases challenging the constitutionality of the laws governing the Revenue powers in relation to tax avoidance schemes.
The constitutionality point was not raised in the earlier cases brought by Mr McNamee and a number of others over the straddle transactions, he said. In all those circumstances, the Revenue wanted Mr McNamee's appeal heard as soon as possible.
The Revenue is investigating other cases where similar transactions had been engaged in and Mr McNamee's action raised issues that "go to the heart" of the way the Revenue operates, counsel said.
The powers in dispute allowed the Revenue tackle "aggressive" tax avoidance schemes put in place "by certain categories of taxpayers and not others".
Michael Collins SC, for Mr McNamee, said he did not consider the appeal required to be prioritised.
The best course would be for the High Court to decide the constitutional point raised in the judicial reviews taken after Mr McNamee's case, he said.