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Developer wins €9m tax refund on yacht

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The luxury yacht Christian O was formerly owned by Greek shipping magnate and husband to Jackie Kennedy, Aristotle Onassis. It is now owned by a limited partnership of which Pino Harris is a member.

The luxury yacht Christian O was formerly owned by Greek shipping magnate and husband to Jackie Kennedy, Aristotle Onassis. It is now owned by a limited partnership of which Pino Harris is a member.

The luxury yacht Christian O was formerly owned by Greek shipping magnate and husband to Jackie Kennedy, Aristotle Onassis. It is now owned by a limited partnership of which Pino Harris is a member.

The Revenue Commissioners have lost a High Court challenge against a decision that millionaire developer Robert "Pino" Harris is entitled to €9m in income tax refunds.

Mr Harris's claim arose out of expenditure on a luxury yacht, the Christina O, which was bought for €65m in 2000 and previously owned by Greek shipping magnate Aristotle Onassis.

Mr Harris, in his action, claimed income tax reliefs arising from his status as a member of a limited partnership registered under the law of the Cook Islands, the Christina O Limited (CL) Partnership. The claim related to the income tax year to April 5, 2001 and for the periods ending December 2001 and December 2002.

Ms Justice Mary Laffoy yesterday ruled that Mr Harris was entitled to refunds because he could not be defined as a limited partner to the extent that he would be subject to the restrictions on the availability of reliefs under Section 1013 of the Taxes Consolidation Act 1997.

When Mr Harris became involved in the Christino O venture, he invested €144,000 and provided €14.3m as a loan, giving him a share of just over 4pc of the CL Partnership.

He claimed the partnership was established for the purpose of acquiring and operating high-class luxury yachts.

In his tax return filed in January 2002, Mr Harris claimed relief for trading losses, capital allowances and interest arising from the purchase and refurbishment of the Christina O yacht by the partnership.

In October 2004, tax appeal commissioners decided Mr Harris was entitled to set off, against his entire income, capital allowances and interest payments arising from the partnership. The appeal determined that Mr Harris was entitled to €9.12m.

Revenue challenged the appeal commissioners decision and also asked the courts to decide whether, pending the outcome of the challenge, Mr Harris was entitled to payments of the tax reliefs.

In her judgment, Ms Justice Laffoy said the question posed in the case was whether Mr Harris "did not fall within the definition of limited partner" within the provisions of the Taxes Consolidation Act.

She said the determination whether Mr Harris is a limited partner and subject to restrictions on the availability of relief came down to the definition of "general partner" as defined under the act.

She said that the Oireachtas's inclusion of the word "general" before the word "partner" in the relevant section of the act prevented the restrictions in the legislation from applying to Mr Harris as had been contended by the Revenue Commissioners.

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