Quinn children in Revenue tax row over house deposit 'gifts' from parents
Three children of former billionaire Seán Quinn are embroiled in a legal dispute with the Revenue Commissioners over tax assessments raised against them.
The dispute centres on claims by the Revenue that the children received gifts totalling €311,000 between them from their parents, but failed to account for capital acquisitions tax on the gifts. This led to assessments being made against them in 2012.
However, in proceedings issued in the High Court, Seán Quinn Jr, Ciara Quinn and Colette Quinn have denied the cash sums were gifts. Instead, all three insist they were given the cash as interest-free loans, which were later repaid.
The distinction is significant as there can be big tax liabilities arising from gifts.
In the proceedings, the siblings are seeking to have assessments quashed and a ruling that the Revenue acted beyond its powers.
They allege the assessments were drawn up under legislation which was not in place at the time the money was given to them by their parents, and, because of this, that the assessments were made without legal power or authority.
The Revenue is opposing the reliefs sought. Documents filed with the court detail how each of the three children bought family homes in 2002 or 2003.
They claim deposits paid on those properties were provided by their parents, Seán Snr and Patricia Quinn, both directors of the Quinn Group at the time, by way of interest-free loans.
The deposit amounts were €225,095 for Ciara Quinn, €62,051 for Seán Quinn Jr and €24,310 for Colette Quinn.
According to an affidavit filed by Colette Quinn, the siblings repaid the loans in 2007 directly to the Quinn Group after selling shares they had in a number of Swedish companies in their international property portfolio.
The siblings said Quinn Group, on their behalf, arranged a mortgage for each of the family homes with Irish Nationwide Building Society and that the mortgage loans remain in their names.
However, the Revenue later looked for information on how the house purchases were funded.
PwC, then accountants to Quinn Group and Seán Snr and Patricia Quinn, sent a letter to the Revenue saying the sums given towards house purchases were in fact gifts.
This prompted Revenue to make tax assessments against the siblings in 2012.
But the Quinn siblings dispute the contents of the PwC letter, saying it was issued without their consent and was not based on their instructions.
"The accuracy of this letter and the characterisation of the deposits as gifts is not accepted by the applicants," the siblings said in a statement of grounds.
However, the Revenue is standing over its actions.
In an affidavit filed by a Revenue solicitor, it is claimed Seán Quinn Snr himself had stated he provided "equity" to two of his children for the deposits on their homes.
The Revenue also says a PwC letter in November 2010 confirmed on behalf of Seán Quinn Snr and the three siblings that each received gifts towards their deposits.
Seán Quinn Snr is not a party in the case. A decade ago he was Ireland's richest person, but lost his fortune following an ill-fated investment in Anglo Irish Bank.
The case is due to be heard next March.