Supreme Court rules out Dunne appeal over Walford stamp duty

A company owned by developer Seán Dunne’s son, John, has failed to persuade the Supreme Court to hear a further appeal over a finding it is liable for €1.4 million stamp duty on the €14 million sale of a house in Dublin 4.

Walford, on Shrewsbury Road, Dublin was at one time the country’s most expensive house when it was bought by Seán Dunne for €57.9 million during the Celtic Tiger years and held in a trust.

Yesreb Holdings, in proceedings against Revenue, had claimed the correct duty on the later 2013 sale for €14 million was €270,000 but the High Court and Court of Appeal agreed with a Tax Appeal Commissioner’s decision it was liable for €1.4 million.

Yesreb earlier this year asked the Supreme Court to hear a further appeal, arguing the case raised matters of general public importance, including concerning the law on stamp duty. Lawyers for Revenue opposed any further appeal.

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In a recently published determination, a panel of three Supreme Court judges ruled the issues raised did not meet the threshold for a Supreme Court appeal. It was not satisfied that any of the matters raised “truly constitute matters of public importance”.

The disputed decisions involved the application of well-established principles as to the construction of taxing statutes, it said. Those had been applied in accordance with the established legal jurisprudence in the “very particular factual matrix” which arose in this case, “which is unlikely to be replicated in other cases”, and no matter of general public importance arises. The court said it was also not satisfied an appeal was necessary in the interests of justice.

[ Sale of Seán Dunne’s Walford led to €1.4m stamp duty liability, appeal court rules ]

Seán Dunne bought Walford in 2005/6 for €57.9 million and held it in the Matsack Nominees trust for his then wife, Gayle Killilea. The couple, who have since separated, never lived there.

In 2013, while it was still in Matsack, it was sold for €14 million to Yesreb Holdings, a Cypriot company owned by John Dunne and held for the benefit of John Dunne and his three siblings. The property was later sold for €14.25 million to another trust, Celtic Trustees, set up by financier Dermot Desmond for the benefit of his children.

Yesreb paid €270,000 in stamp duty based on the 2013 purchase price. In 2016, Revenue assessed the amount payable, inclusive of the €57.9 million 2005 price, at about €1.4 million. This included a deduction for interest due which was about the same amount already paid by Yesreb.

The primary issue for the decision was whether the conveyance to Yesreb was a sub-sale of the property. A sub-sale meant the conveyance was sufficiently stamped for €270,000 and if not, it attracted a liability for stamp duty of €1.4 million as well as interest. A secondary issue was whether, even if it was subject to the higher amount, Yesreb was the “accountable person” in respect of any more than the €270,000 it had paid.

After Revenue made a €1.4 million plus interest assessment, Yesreb appealed to a Tax Appeals Commissioner who in 2019 upheld Revenue’s decision. The commissioner found, to avail of sub-sale relief, the conveyance must have been “in consequence” of two separate contracts. Since Seán Dunne had no interest, legal or equitable, in the property at the date of the sub-sale contract, he had no capacity to conclude the contract, she found. The commissioner’s ruling was upheld by the High Court and Court of Appeal.