A taxpayer who said that he once expected to make a profit of €2 million from building and “flipping” a few houses to “big spenders” on a 4.5 acre site has been left with a tax bill of €61,281.
This follows the failure of his appeal at the Tax Appeals Commission (TAC) against a Revenue assessment for that amount.
The man purchased the site for €330,000 funded by way of a loan in 2005 and claimed trading losses of €168,120 from 2008 to 2015.
However, Revenue disallowed the losses after concluding that the man was not carrying on any trade to qualify for such losses. Appeals Commissioner Simon Noone upheld the Revenue assessment.
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In his findings, Mr Noone concluded that “the appellant’s claim for trading losses on his income tax returns was based on the incorrect and inaccurate basis that he had been engaged in trade”.
[ Farmer loses Revenue appeal over €351,545 capital gains tax billOpens in new window ]
In evidence at the TAC, the man said he purchased the site with a view to building and “flipping” a few houses.
At the TAC hearing, he said that he believed it would be attractive to “big spenders” and he anticipated achieving a €500,000 profit on the first house, which would enable him to build the second, and so on and he expected total profit of around €2 million.
He said that there was a good chance of three to five houses, with a possibility of more.
The appellant stated that he did not buy the site to build a house for himself and stated that the current status of the site was that “it’s still there”.
He did not register for VAT because “I figured nothing had happened yet”.
When it was put to the appellant at the hearing that he abandoned his plans in 2007 to develop the land, he stated that “the plans abandoned me…the environment changed,” referring to the property crash.
Mr Noone found that the evidence suggested a distinct lack of urgency on the part of the appellant to progress the development of the site.
He said that he was satisfied that the appellant never intended to engage in the trade of land development.
Mr Noone said that prior to 2005, the appellant had no experience in land development, did not obtain funding to build the homes, never applied for planning permission for the homes and the land remains zoned as agricultural.
