In a recent tax dispute, a couple has lost their appeal to claim €243,000 of expenses incurred while transferring shares between them. The dispute arose over the sale of shares from the wife to her husband, which the couple believed was a legitimate tax strategy. However, the Revenue Commissioners disagreed, arguing that the transfer was a scheme to avoid tax. As the couple’s appeal failed, they will now have to pay the full amount of tax owed. This case highlights the importance of seeking professional advice and ensuring the legality of any tax-saving measures.
A married couple has been issued an additional tax bill of €243,000 after the wife sold €1.1m worth of shares in her company, which she majority-owned, to a company solely controlled by her husband. The couple argued that only capital gains tax should be payable on the transaction, but the Tax Appeals Commission found that the share sale had no bona fide commercial reason and the total tax bill was €605,000. The names of the couple and their companies have not been revealed. The wife owned 90 of the 100 shares prior to April 2014, when her 90 ordinary shares were converted into A ordinary shares and their value capped at €1.1m. Later that same month, she sold the 90 A ordinary shares to her husband’s company for €1.1m. The businessman appealed to the Tax Appeals Commission, but it held that the disposal of the shares was not for a genuine commercial reason, and the tax assessment must stand.
In conclusion, the case of this couple losing their appeal over the sale of shares between spouses highlights the importance of seeking professional tax advice before making any financial decisions. It is crucial to understand the tax implications of any transaction to avoid facing hefty tax bills and legal consequences in the future. As always, it is better to be safe than sorry. So, make sure to consult with a tax expert and stay informed about the latest tax regulations to protect your financial future.
