The Court of Appeal has dismissed Louis FitzGerald’s appeal against a €200,000 domicile levy assessment for each of 2010 and 2011, affirming the High Court’s decision. The appeal concerned a case stated under section 949AQ of the Taxes Consolidation Act 1997. The court answered each of the six questions in the case stated in the negative.
FitzGerald, a hotelier who operated the Louis FitzGerald Hotel in Newlands Cross, Dublin 22, argued that losses from the hotel trade, augmented by capital allowances, reduced his worldwide income below the €1 million threshold for the levy. He had claimed income tax refunds of €361,346 for 2010 and €919,557 for 2011. Revenue retained €200,000 for each year on the basis that the domicile levy was due, and issued assessments totalling €400,000.
The Court of Appeal held that the losses were deductions in computing total income, rather than expenses reducing income from each individual source. The statutory definition of worldwide income required income from all sources to be calculated without regard to amounts deductible from or in computing total income. The court therefore concluded that FitzGerald’s worldwide income exceeded €1 million in both years and that he met the relevant-individual criteria. It rejected this ground of appeal.
A second issue concerned the €209,281 in Universal Social Charge (USC) FitzGerald paid in 2011. He argued that USC should count as income tax when assessing whether his income tax liability was below €200,000, a threshold relevant to the levy. The court rejected that interpretation. It said the statute defined liability to income tax by reference to income tax due under the Tax Acts, while USC was charged under a separate statutory code. Although USC is a tax on income, the court held it was not income tax for this definition. FitzGerald’s USC payment therefore did not take him outside the levy criteria.
The court affirmed the High Court’s order and dismissed the appeal. It gave a preliminary view that Revenue had succeeded entirely and should receive its costs, to be adjudicated if not agreed. FitzGerald could request a short hearing within 14 days to argue for a different costs order; the judgment does not state a final costs order.