The Four Courts. The High Court has found Revenue was incorrect in determining that the release of the balance of a €6 million property loan taken out by a development company should be treated as a receipt of the trade.The High Court has found Revenue was incorrect in determining that the release of the balance of a €6 million property loan taken out by a development company should be treated as a receipt of the trade.
It planned to build a residential development on the site but this never happened, due in a large part to the financial crisis of 2007/8. In 2016, following a failed attempt to sell the lands at auction, the bank agreed, in return for a final payment of €250,0000, to release Arlum from its security and waive the balance due on the loan. The amount released was just over €6 million.
Following substantial correspondence between the Revenue and the company’s tax advisers between 2018 and 2021, Revenue ultimately determined in May 2021 that this debt write-off should be treated as taxable income, which, if correct, would have the effect of reducing the losses being carried forward to some €1.1 million, the judge said.