A NUMBER of business people and company directors have challenged determinations by the Revenue Commissioners they should be disallowed sums of up €6.2 million on grounds certain financial transactions engaged in by them fell within the anti-avoidance provisions of the tax Acts.
It is claimed the disputed Revenue decisions of 2011 arose from predetermined views within the Revenue that a number of people were engaged in tax avoidance via arrangements to create and use contrived capital losses, with one such scheme allegedly used to generate artificial capital losses of €409 million to shelter capital gains tax of over €85 million.
The applicants are challenging the manner in which a Revenue officer in 2011 formed the opinion their transactions were tax avoidance transactions for the purpose of section 811 of the Taxes Consolidation Act with the effect tax advantage should be withdrawn and claims for capital gains losses should be disallowed.
As a result of information received after Freedom of Information requests, the applicants allege the Revenue had identified and grouped together about 26 cases in which similar arrangements were concluded with a London-based global assets management company, referred to as the “Schroders Ready Made 26”. It is alleged the transactions of the applicants which the Revenue sought to impugn fell within the Schroders Ready Made 26.
Four sets of proceedings challenging the Revenue opinions were transferred to the Commercial Court yesterday by Mr Justice Peter Kelly. A test case will be selected to address the issues.
