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Appellant with ‘world-wide income’ of in excess of €1 million is liable for domicile levy

By: James Cross BL

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High Court, in a case stated, finds that appellant had  a ‘world-wide income’ of in excess of €1 million and that his payment of over €200,000 of the Universal Social Charge did not exempt him from paying the domicile levy.

Revenue – tax – case stated - challenge to a decision of a Tax Appeal Commissioner regarding the domicile levy of €200,000 per annum - domicile levy is a levy which was introduced in 2010 - a view to ensuring that wealthy individuals who were domiciled in Ireland paid a levy of €200,000 - certain wealthy individuals were able to benefit from the use of tax shelters and other tax avoidance schemes whereby they were paying little or no tax and hence the domicile levy was introduced to require them to pay at least €200,000 to the Revenue - the domicile levy applies to an individual who is domiciled in Ireland, whose worldwide income exceeds €1 million, whose properties are greater in value than €5 million, but who pays income tax in the relevant year of less than €200,000 - worldwide income is in excess of €1 million – argues that he is not liable for domicile levy – statutory interpretation - whether he is a relevant individual for the purposes of the domicile levy, i.e. whether he had a world-wide income of more than €1 million - Commissioner was correct in her determination that a loss under section 381 of the Taxes Consolidation Act 1997, does not constitute a deduction in estimating income from all sources but constitutes a deduction in computing total income - Court does not believe there is any ambiguity about this interpretation since this is the plain meaning of the words - Interpreting s. 531AA in a manner which disregards such tax shelters (in this case capital allowances) in determining the individual’s world-wide income would appear to this Court to be consistent with the purpose of the domicile levy is to ensure that wealthy individuals do not use tax shelters and tax avoidance schemes to pay little or no income tax relative to their income – whether paying USC the same as paying income tax - SC is treated under our tax code as very different to income tax - Court concludes that the reference in the definition of ‘relevant individual’ to a person having paid less than €200,000 in income tax is not a reference to a person having paid less than €200,000 in USC – appellant did have a ‘world-wide income’ of in excess of €1 million and his payment of over €200,000 in USC did not exempt him from paying the domicile levy –

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