The Court of Appeal has dismissed Yesreb Holdings Limited’s appeal over stamp duty on its 2013 acquisition of Walford, a house at 24 Shrewsbury Road, Ballsbridge, Dublin. The court upheld the High Court’s conclusion that the conveyance did not qualify for sub-sale relief and that Yesreb was the accountable person for the duty assessed on it.
The dispute arose from a 2005 contract under which the executors of Patrick Aloysius Duggan agreed to sell Walford to Sean Dunne for €57.95 million. That sale was not completed at the time specified in the contract. In 2013, the executors conveyed the property directly to Yesreb under a deed that described the transaction as a sub-sale. The deed recorded consideration of €14 million from Yesreb, although the judgment says no money changed hands under the related loan agreement.
Yesreb paid €270,000 in stamp duty, calculated on the €14 million consideration, claiming relief under section 46 of the Stamp Duties Consolidation Act 1999. Revenue assessed a further €1,429,000 in duty, plus €269,670 interest, giving credit for the sum already paid. The Tax Appeals Commission found that the statutory conditions for relief were not met and that Yesreb was accountable for the duty. The High Court answered the first question of law in the case stated in the affirmative, upholding the Commission’s determination, and rejected Yesreb’s argument that it was not accountable for duty calculated by reference to both transactions.
The Court of Appeal said section 46 required the person who contracted to buy the property to be the same person, acting in the same capacity, as the person who contracted to sell it. The conveyance also had to be in consequence of the sub-sale contract, and the same property had to pass directly to the sub-purchaser. The court concluded that Dunne had no power to sell the property under the 2013 contract or to require the executors to convey it to someone other than himself without their prior written consent. It therefore found no legal link between that contract and the following day’s conveyance that could satisfy the statutory requirement.
The court also upheld the finding that Yesreb was the accountable person because it was the purchaser under the conveyance. It rejected the argument that accountability was limited to duty on the €14 million Yesreb was recorded as paying.
Yesreb had sought to have the case stated sent back to the Commission to consider factual issues concerning a possible transfer of trust interests and the Statute of Frauds. The Court of Appeal agreed that the High Court had no jurisdiction to reopen the determination for that purpose, because the appeal concerned questions of law and the proposed issues had not been canvassed before the Commission.
The appeal was dismissed. The court gave a preliminary view that Revenue should receive its costs, while allowing either party ten days to request a short hearing on costs. The judgment was delivered on 1 June 2022.