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Claire Proes v The Revenue Commissioner

Whether an accountants workings are within the power and possession of the taxpayer

Issue: Residence and Domicile

The taxpayer carried on a trade as an electrical contractor and appealed against an assessment for the tax year 1986/1987. He engaged an accountant to prepare accounts and subsequently employed an accountant to prepare and furnish to the Inspector of Taxes the necessary accounts and documentation. The Inspector was not satisfied with the documentation which he received and requested production of the nominal ledger prepared by the accountant as part of his working papers.

The taxpayer was born in Ireland but became a British national and resided outside Ireland for approximately 42 years. In 1982 she returned to live in Ireland where she had visited for many years. The taxpayer was assessed under TCA97 s71(1) for payment of tax on income arising from securities outside the State. The taxpayer argued that the exemption (remittance basis) under sub-section 2 applying to people who are not domiciled in the State apply to her

At the Circuit Court, it was held that she was domiciled at all relevant times within the State. The taxpayer had lived in various countries throughout her life and had never permanently resided anywhere. Shortly before her husbands death they took up residence in the UK which they intended to be permanent. After her husband's death she had to vacate the house provided by his employers and she moved into a holiday home in Ireland which they had purchased. She considers the house in Kinsale to be a permanent home "for the time being". She had acquired

a UK house which was being refurbished for her use. The taxpayer intended to return to the UK at some later stage.

The Decision:

The correct question to ask is whether her English domicile of choice had been abandoned. No intention to abandon her English domicile can properly be inferred from the facts.

Basis for Decision:

Every person receives at birth a domicile of origin, but a domicile of choice may be acquired by the combination of residence and intention of permanent or indefinite residence. A domicile of choice may be lost by abandonment. This will occur when the person ceases to reside in the country of domicile and also ceases to have an intention to return to it as their permanent home.

When a domicile of choice is abandoned either (1) a new domicile of choice is acquired; or (2) the domicile of origin reverts.

TCA97 s71(2) imposes the burden of proving that domicile is not in Ireland on the taxpayer and on the facts of this case require her to establish that she did not abandon her English domicile.

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