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Friday 24 January 2020

Desmond left with €1.4m stamp duty bill over deal to buy former Killilea mansion

Tax bill linked to previous sale of Ireland's most expensive residence

Dermot Desmond Picture: Damien Eagers
Dermot Desmond Picture: Damien Eagers
The Walford mansion on Dublin’s prestigious Shrewsbury Road. Pic: Mark Condren
Sean Dunne and Gayle Killilea
Dermot Desmond
Shane Phelan

Shane Phelan

Left empty and in a state of disrepair, Ireland's most expensive home, Walford, which once fetched almost €58m, became a curious relic of the Celtic Tiger era. In recent years it has never been far from headlines, mainly due to courtroom arguments over just who its beneficial owner was back then - bankrupt property developer Seán Dunne or his glamorous ex-wife Gayle Killilea.

Now the 1.8-acre Edwardian era property on Shrewsbury Road, one of Dublin's most prestigious streets, is set for a fresh lease of life under the ownership of a Dermot Desmond-linked trust.

The billionaire financier's Celtic Trustees Ltd (CTL), an Isle of Man trust set up for the benefit of his children, bought Walford for a knockdown price of €14.25m in 2016.

It subsequently secured planning permission to demolish the mansion and build an even bigger residence in its place.

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Sean Dunne and Gayle Killilea
Sean Dunne and Gayle Killilea

But the Irish Independent has learned there has been a slight sting in the tail for the Desmond camp.

This has come in the form of a €1.4m tax bill CTL must now cover due to a deal with its immediate predecessors as owners, Cyprus-registered company Yesreb Holdings Ltd.

Yesreb, owned by Mr Dunne's son John, bought Walford for €14m in 2013, using a loan from Ms Killilea.

But the company, whose beneficially ownership was initially shrouded in mystery, was unable to get the planning approval it wanted for a development at the property.

When it sold Walford on to CTL in 2016, part of the deal was that the Desmond trust would pay a stamp duty bill still owed by Yesreb from its purchase of the mansion three years earlier.

Yesreb has been in dispute with Revenue for several years about the size of that bill. The company made a self-assessed stamp duty return of €270,000 in 2013 on the basis it was entitled to certain tax reliefs.

The Walford mansion on Dublin’s prestigious Shrewsbury Road. Pic: Mark Condren
The Walford mansion on Dublin’s prestigious Shrewsbury Road. Pic: Mark Condren

But the taxman was not satisfied and issued an assessment for €1,428,670 in February 2016.

The assessment was upheld last month by the Tax Appeals Commission and, due to its agreement with Yesreb, CTL is now on the hook for the bill.

The commission's findings could also have implications for Ms Killilea as they contradict a key conclusion reached by a US jury which last year ordered her to pay €18m to a bankruptcy trustee for the benefit of her ex-husband's creditors.

Walford attracted much attention in 2005 when it was sold for €57.9m. There was a certain amount of intrigue surrounding the sale, following the death of former owner and one-time Hibernian Insurance chairman Patrick Duggan.

While Seán Dunne, a then high-flying Co Carlow-born property developer, was linked with the purchase, a confidentiality agreement meant a veil of secrecy surrounded the deal.

It would later emerge Mr Dunne purchased the property for Ms Killilea, a former journalist and well-known socialite.

The developer had big plans.

He personally instructed a project management firm about extensive renovation plans he had in mind, including the creation of a dining room for 16 people and an indoor swimming pool, with its own bar, looking out over the gardens. But these plans came to nothing and the couple never lived there.

The condition of the mansion and Mr Dunne's fortunes had deteriorated considerably by the time Walford was sold to Yesreb on March 29, 2013.

On the same day, Mr Dunne filed for bankruptcy in the US with debts of €700m.

He was adjudicated bankrupt in Ireland later that year and will remain in bankruptcy here until 2028 after a judge found he had failed to co-operate with an Irish bankruptcy official, including hiding or not disclosing information about certain assets.

In the US, his bankruptcy trustee there accused him of fraudulently transferring €100m in assets to Ms Killilea.

The claims led to a trial in Connecticut where a jury found some assets were fraudulently transferred and ordered Ms Killilea to pay the trustee €18m, including the €14m from the sale of Walford.

Ms Killilea has since been in involved in settlement negotiations with the trustee.

The Tax Appeals Commission's findings could now have a bearing on those discussions and could form a ground of appeal for Ms Killilea.

She maintained Walford had been owned by her since 2006, but the jury found the property was only transferred by Mr Dunne to his ex-wife on the day he filed for bankruptcy.

In contrast, the commission found Mr Dunne had no interest in the property in 2013.

Irish Independent

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