The Supreme Court has dismissed Ronan McNamee’s appeal against the refusal of judicial review of a Revenue Commissioners notice concerning capital gains tax on transactions he and his wife entered into in 2007.
The appeal concerned whether the notice, issued on 24 August 2011 under section 811 of the Taxes Consolidation Act 1997, was invalid because of when it was issued, alleged bias or prejudgment, or a failure to give McNamee an opportunity to make representations. The Court said it was not deciding whether Revenue was right to treat the transactions as tax avoidance or whether its calculations were correct. Those matters remained for a separate appeal to the Appeal Commissioners.
Revenue’s notice said the transactions gave rise to a tax advantage of €5,121,107.60, with a 10% surcharge and interest. The transactions involved a foreign exchange straddle that generated a claimed loss of about €25.7 million and a gilt straddle that generated an exempt gain of about €25.4 million. The judgment described the combined monetary loss as about €250,000. These were the Revenue position and figures set out in the notice and report, not findings made in this judicial review appeal.
McNamee argued that Revenue had formed its opinion well before August 2011, and therefore failed to notify him immediately as required by law. He also alleged prejudgment and apparent bias, and argued that Revenue’s refusal to provide the report sent to the nominated officer denied him a fair opportunity to respond.
The Court upheld the High Court’s finding that the nominated officer formed the opinion on 24 August 2011, after receiving a report two days earlier. It considered that the earlier internal documents showed general concern about capital-loss schemes, but did not establish that Revenue had formed the required opinion about McNamee’s specific transactions. The Court also noted that relevant officials had been available for cross-examination in the High Court, but the nominated officer and Michael O’Grady were not cross-examined.
The Court rejected the bias and prejudgment arguments. It also held that refusing to provide the report before the opinion was formed did not breach natural or constitutional justice. It pointed to the statutory appeal process, under which the opinion and related calculations would not become final while an appeal was pending. The separate tax appeal was still in progress when this judgment was delivered.
The Court dismissed the appeal, leaving the High Court’s refusal of judicial review in place. It did not decide the underlying tax dispute.