Four shareholders in liquidated company must pay tax bill of €1.56m

Four shareholders of a liquidated institution indispensable present wage a combined income taxation measure of €1.56 million.

The 4 mislaid an 11-year agelong taxation conflict with Revenue Commissioners concerning a €7.59 cardinal payout arising from the voluntary liquidation of the institution astatine the Tax Appeals Commission (TAC)

Arising from the payout successful February 2008, 3 of the 4 each had €2.449 cardinal transferred to their AIB slope accounts from the liquidator’s relationship with the 4th shareholder receiving €244,966.

The 4 received the payout aft the institution was placed into voluntary liquidation connected December 21st, 2007.

The voluntary winding-up came 9 days aft the institution passed a peculiar solution connected December 12th giving the 4 ‘A’ mean shareholders the close that successful the lawsuit of a winding up, immoderate remaining surplus of assets would beryllium distributed to them.

The transportation of the shareholders’ stock rights was the absorption of Revenue’s probe which commenced successful 2011 with Revenue stating that the transportation was chargeable to income taxation nether Section 130 of the Tax Consolidation Act.

The 4 contended that nary income taxation liability arose from the €7.59 cardinal superior distribution.

However, the TAC has upheld the €1.56 cardinal income taxation appraisal issued by Revenue successful December, 2012 with 3 of the 4 parties each present near with a €499,993 income taxation bill.

Commissioner Claire Millrine recovered that the provisions of a Revenue anti-tax avoidance measure, Section 130 of the Tax Consolidation Act 1997 applied to the transportation of the stock rights from the shareholder to the “A” mean shareholders.

The 40-page TAC study states that Section 130 is successful portion an anti-avoidance proviso against attempts to retreat funds from a institution different than done its stock superior oregon securities.

The 4 argued that the provisions of Section 130 did not use arsenic it was a liquidation case.

However, Ms Millrine stated that the taxable lawsuit was not the €7.59m organisation made successful the winding up, but alternatively the earlier transportation of stock rights from the holder of the mean shares to the “A” mean shareholders.

She recovered that the transportation of stock rights constituted a transportation of assets.

The ruling confirms that the TAC has been requested to authorities and motion a lawsuit for the sentiment of the High Court successful respect of its determination.