Tax Appeals Commission Determinations – February 2026

This month, we review a capital acquisitions tax appeal involving alleged family loans, business expenses, consultancy fees, and significant unconfirmed cash withdrawals, and we review a determination concerning a time‑barred claim for an R&D tax credit under section 766C TCA 1997.

238TACD2025 – Capital Acquisitions Tax: Gifts vs Loans, Business Expenses & Cash Withdrawals

This appeal concerned CAT assessments for the 2012–2015 tax years, arising from substantial cash movements identified during a Revenue audit. The Respondent treated various amounts received by the Appellant as gifts—both “confirmed cash withdrawals” paid directly to her and “unconfirmed cash withdrawals” taken from family accounts. The Appellant contended that a portion of these funds represented a €225,000 family loan, sums used to pay business expenses, and consultancy fees taxable under income tax rather than CAT, while also maintaining she had not received any of the unconfirmed withdrawals.

On the alleged €225,000 loan, the Commissioner found no contemporaneous evidence—no loan agreement, emails, statements, text messages, repayment terms, or security. The first written reference was a letter produced close to the original hearing date. The probate form and the relevant will made no reference to any loan. Although the Appellant produced a €20,000 bank draft and a typed “schedule of repayments,” there was no evidence of lodgement or supporting bank statements or tax returns. The Commissioner determined that on the balance of probabilities, the sum was not a loan but a gift, with additional amounts of €70,000 (2012) and €25,000 (2015) also found to be gifts and assessable to CAT.

The Appellant also claimed certain amounts were business expenses. However, she produced no supporting documentation showing how the invoices were paid or from what accounts. The NPPR charges related in part to her own properties, and her submissions varied between €76,000, €28,834, and €7,200. The Commissioner found the evidence unclear, inconsistent, and insufficient to establish that the amounts treated as gifts were genuine business expenses.

Both parties agreed that €34,700 received as consultancy fees had since been assessed to income tax. This amount was therefore not a gift for CAT purposes, and the CAT assessments were reduced accordingly.

The most complex issue concerned the unconfirmed cash withdrawals of €257,676. While Revenue argued these should be treated as gifts to the Appellant based on an overall pattern of family financial flows and lifestyle indicators, there was no documentary evidence that she received these funds, and the Appellant repeatedly denied doing so. The Commissioner declined to infer receipt merely from surrounding circumstances such as property listings or the absence of evidence identifying an alternative recipient. Finding no basis on the balance of probabilities to treat the unconfirmed withdrawals as gifts, the Commissioner held that the Appellant had discharged the burden of showing the assessments were wrong in this respect.

The assessments were therefore adjusted: increased to include additional confirmed gifts of €70,000 and €25,000; reduced to exclude consultancy fees assessed to income tax; and reduced to remove the unconfirmed cash withdrawals. The Commissioner emphasised the taxpayer’s burden of proof in CAT appeals and noted the absence of meaningful contemporaneous records as a decisive factor.

236TACD2025 – R&D tax credit: statutory time limit and a valid return

This appeal concerned the refusal of a €41,675 R&D tax credit claim for 2022 on the basis that the Appellant did not file the required specified return within the statutory 12‑month deadline. The Appellant had filed an amended CT1 on 27 December 2023 indicating an intention to claim the credit, and on 28 December 2023 submitted correspondence via MyEnquiries that referenced the R&D specified return form. However, due to connectivity issues while the Appellant’s accountant was abroad, the attachment did not transmit. The Appellant only became aware of this in March 2024 after discovering that an incorrect email address had been entered into MyEnquiries, which meant earlier Revenue notifications had not been received. The completed specified return was ultimately provided in mid‑2024.

Revenue refused the claim on the basis that, for 2022 only, both the CT1 and the R&D specified return form constituted the prescribed return for section 766C TCA 1997. The specified return had to be filed by 31 December 2023, and the governing provisions state that any R&D claim “shall” be made within 12 months of the end of the accounting period, providing all information required under subsection (9). Revenue emphasised that it had no statutory discretion to accept a late claim.

The Appellant argued that the claim had been substantively completed on time, that the omission was the result of an innocent upload failure, and that fairness should allow the belated filing to be accepted. It contended that significant preparatory work had been undertaken before the deadline, including procurement of an independent technical report, and that both CT1 and MyEnquiries correspondence had been submitted within the statutory period.

The Commissioner accepted that the Appellant had made genuine efforts to comply but held that the legislative wording was mandatory. Both section 766(5) and section 766C(9) require that a claim — and the associated specified information — be filed within 12 months. The Commissioner cited established principles that exemptions and credits must be interpreted strictly (Doorley), that the starting point is the plain meaning of the statute (Heather Hill, Perrigo, Dunnes Stores, Bookfinders), and that the Commission has no equitable or supervisory jurisdiction to mitigate statutory rules (Lee v Revenue).

As the Appellant did not successfully submit the specified return form before 31 December 2023, the claim was invalid in law, regardless of the underlying merits of the R&D activity. The Commissioner therefore upheld Revenue’s refusal.