Businessman loses appeal over €317,312 inheritance tax bill
capital acquisitions tax (CAT)
stemming from his
inheritance
of a house from his aunt.
The man's aunt died in 2017 and he inherited a home from her. Following an investigation, the
Revenue Commissioners
last year issued a bill to the man alleging underpayment of €288,465 in CAT along with €28,846 surcharge for a late filing.
Revenue issued its assessment on the basis that the house the man received was not his aunt's main residence and that he also received free accommodation and cash gifts from the woman.
Disputing the assessment and claiming exemption from inheritance tax, the man claimed he was a dependent relative of his aunt and that he is permanently incapacitated due to ongoing mental health issues.
READ MORE
A submission to the
Tax Appeal Commission
stated that the former managing director is at the end of his working life and unable to support himself. It further said he was 'very vulnerable and emotionally struggling to survive, which his medical reports have clearly stated'.
However, in her findings, appeals commissioner Clare O'Driscoll found that at the time of the aunt's death in 2017 or before it, the man was not permanently and totally incapacitated due to mental or physical infirmity from maintaining himself. grounds that would have excused him from inheritance tax.
Ms O'Driscoll said the medical documentation submitted did not establish that the appellant was at any time permanently and totally incapacitated.
She also pointed to the man's
profile from August 2022 which stated that the man was at the time managing director of a business and had been since July 1988.
A letter, dated April 2024, saying the man 'has suffered from an extremely disabling condition for the past 25 years or so' was submitted on his behalf by a doctor.
The appellant 'is doing everything in his power to combat the exceptional level of anxiety that he is experiencing ... It would not surprise me if the High Court designated him as a vulnerable adult and made him a Ward of Court to protect his welfare', he said.
However, the doctor did not appear as a witness to be cross-examined.
Ms O'Driscoll accepted that the appellant has experienced poor mental health since at least 2008 but none of the documentation states that the appellant was at any time permanently and totally incapacitated.
She found that the man was not a dependent relative and therefore not entitled to an exemption from CAT on that ground. She also said the man was not entitled to an exemption to CAT as the home was not his aunt's main residence.
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