A member of the family behind the building firm Shannon Homes has won a legal action that would have left him with a multimillion capital acquisitions tax (CAT) bill.

The Court of Appeal overturned a High Court finding that a son of one of Shannon’s former owners, Joseph Stanley snr, was not covered by a four-year time limit for assessing him for CAT over a 2007 transfer of the father’s assets to his sons.

In the early 2000s, Mr Stanley retired. While he retained ownership of his stake in Shannon, the Dublin business was effectively carried on by his five sons in conjunction with other shareholders.

While the transfer took place in 2007, it was not until December 2013 the Revenue Commissioners raised an assessment of just over €7 million in CAT for Robert Stanley. He disputed that and lodged an appeal with the Revenue.

Correct return

Mr Stanley argued, among other things, there was a four-year time limit, after such transactions, for the Revenue to raise an assessment, under the provisions of the 2003 Capital Acquisitions Tax Consolidation Act (CATCA).

Revenue argued the time limit did not apply where a person did not deliver a correct return, as had happened, it alleged, in this case.

The appeal court ruled Mr Stanley had delivered a correct return and therefore the time limit did apply.

Mr Justice Michael Peart, on behalf of the three-judge appeal court, said in order for the four-year limit to be dis-applied, there must be either fraud or neglect by the taxpayer and there was no question of that here.