Ms Justice Caroline Costello has now issued her judgment in an eagerly awaited appeal by the Revenue Commissioners against a decision of the Tax Appeal Commission.
Leanne Deane had originally appealed against a tax assessment of €52,000 made against her by the Revenue Commissioners in connection with her inheritance from her father of the family home. Leanne Deane had argued that she was entitled to tax relief under section 86 of the Capital Acquisition Tax Consolidation Act 2003, otherwise known as Dwelling House Relief. The Revenue Commissioners had argued that as she was also due to inherit an interest in other investment properties from her father, she was not eligible for such relief. It is a condition of the relief that you do not have a beneficial interest in any other property at the time of the inheritance.
However, the High Court has concluded that Leanne Deane was eligible for the relief on the facts presented as the question of if she had a beneficial interest in any other houses only had to be answered in the negative at the date of death of her father. At the date of death of her father, she had no beneficial interest in the other investment properties and therefore was entitled to avail of the relief.
The Revenue strenuously argued its case that the purpose of the dwelling house relief is to avoid a beneficiary being forced to sell a family home to pay a tax bill. It is not therefore intended to apply when a beneficiary is also receiving other investment properties in the same inheritance which they could choose to sell to pay the tax bill that would otherwise be due on the family home. It remains to be seen therefore whether the conditions to avail of this relief will be changed in the light of this judgment. Nevertheless, this judgment does show the importance of carefully considering the availability of any tax reliefs and continuing to re-evaluate your choices based on any later changes in the law.