Irish oil executive Oisin Fanning loses £250,000 case over tax on luxury flat

Oisin Fanning of San Leon. Photo: Simon Dawson/Bloomberg

John Mulligan Twitter Email

March 16 2023 02:30 AM

Oisin Fanning, the chief executive of UK-listed oil and gas exploration firm San Leon Energy, has lost a last-ditch effort to reverse a £250,000 tax bill he was hit with after buying a luxury £5.2m (€5.9m) flat in London’s upmarket Grosvenor Square.

It likely brings an end to a nearly decade-long battle fought by the businessman. His action has been a test case for dozens of appeals by other individuals.

Mr Fanning is likely to have spent hundreds of thousands of pounds since 2014 in battling Britain’s Revenue & Customs in the case.

The businessman bought the property on the exclusive London square in 2011, with a £300,000 loan from San Leon and a five-year mortgage from Barclays Wealth.

Residential property purchases in the UK are normally liable for stamp duty land tax, which depends on the value of the property.

Mr Fanning’s property would have been assessed for a 5pc liability at the time of the purchase, but he filed an stamp duty return indicating he had no liability.

He insisted that no tax was due because he had entered into a transaction with San Leon on the date of the purchase completion. Under that agreement, Mr Fanning agreed to grant San Leon an option to purchase the property at a date between September 2016 and September 2031. The cost of that option to San Leon was just £100.

“When the transactions were entered into, Mr Fanning was the executive chairman of San Leon, but he was not ‘connected’ with it for tax purposes,” notes a ruling this week by the Court of Appeal in London.

But Revenue & Customs disagreed with Mr Fanning’s assessment that he had no stamp duty liability and concluded he had engaged in a tax avoidance scheme. In 2014, it determined that Mr Fanning was liable for £250,000 in duty.

Mr Fanning unsuccessfully appealed to the First Tier Tribunal. During that appeal, San Leon argued that it was happy to assist Mr Fanning in his purchase on the basis that the flat could be rented out to San Leon staff. Mr Fanning appealed that 2020 ruling on a number of grounds, culminating in his final effort at the Court of Appeal.