O'Brien not liable for €57m tax bill as ruling upheld
BUSINESSMAN Denis O'Brien will not have to pay almost €57m in capital gains tax following the sale of his mobile phone company more than a decade ago.
Ms Justice Mary Laffoy has ruled that the Revenue Appeals Commissioner was correct to decide that Mr O'Brien's permanent home in the tax year 2000/2001 was at Quinta de Lago, Almanscil, Portugal, and not in Ireland.
The High Court proceedings arose out of a decision by the Revenue Appeals Commissioner, Ronan Kelly, that Mr O'Brien's home was in Portugal and not Ireland at the time he sold his stake in Esat Digifone to British Telecom in 2000.
This decision meant he was not liable for a €56.8m tax bill on the €285m he received for his shares.
However, 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.
Ms Justice Laffoy held yesterday that the finding was correct. "Having regard to the evidence given and the facts found by the Appeal Commissioner, he was correct in holding that 6 Raglan Road, Ballsbridge, Dublin 4, was not a permanent home available to the appellant for the tax year 2000/2001 for the purposes of Article 4.2 of the Ireland/Portugal Double Taxation Convention," the judge said.
Mr O'Brien was also awarded costs of the High Court proceedings but Ms Justice Laffoy granted a stay on her costs order to allow Revenue to consider an appeal to the Supreme Court.
The court had heard that 6 Raglan Road, Ballsbridge – a seven-bedroom detached period house – was one of a number of investment properties in Dublin that Mr O'Brien had purchased from the early 1990s.
The Revenue argued that although it accepted Mr O'Brien moved with his family to Portugal in February 2000, he also had a permanent home available to him at that time in Raglan Road, which, when he had bought it, was habitable.
In view of this, the Revenue claimed, the Appeals Commissioner should have gone on to decide whether Mr O'Brien's personal and economic interests were closer to Ireland than to Portugal.
If they were closer to Ireland, it would have made him liable for tax in Ireland in accordance with the Ireland/Portugal Taxation Convention.
Ms Justice Laffoy said that although 6 Raglan Road was owned by a company controlled by Mr O'Brien, he had no personal link with the property.
She added that he had not arranged to have the house available to him, and that construction works were under way from June 2000 to February 2002, which would have made the property unfit to be occupied.
A number of architectural and building experts had considered the property in need of extensive renovation that was not completed until 2002.