The Gazette 1986

sep T em BER 1986

GAZETTE

43. Ibid at p. 15. 44. [1985] I.L.R.M. 200.

74. Cronin (Inspector of Taxes) -v- Youghal Carpets (Yarns) Ltd., Supreme Court, unreported, 28 March, 1985. (Availability of Export sales relief). Breathnach (Inspector of Taxes) -v- McCann [1984] I.L.R.M. 679 (H.Ct.). See, also, Mac Gioilamhaith (Inspector of Taxes), High Court, unreported, 2 May, unreported, 24 July, 1984. McWilliam J. Knockhall Piggeries -v- Kerrane (Inspector of Taxes), (H.Ct.), unreported, 2 May, 1985, Barrington J.). 75. The taxpayer had undertaken certain share transactions involving the use of options (s.47 CGTA, 1975) and the 'connected persons' rules (s.33) CGTA, 1975) to produce an allowable loss for Capital Gains Tax purposes. Counsel for the taxpayer argued that the Furniss principle should not be followed because the Appeal Commissioners were bound by the Duke of Westminister's case, and, alternatively, that the principle represented bad law, would give rise to double taxation and would tend to substitute administrative practice for statute law. The Commissioners held that Furniss did not in fact conflict with Westminster, as had been pointed out by the law lords in Ramsay, Burmay and Furniss, and found in favour of the Revenue Commissioners. This case is under appeal. The authors understand that Furniss -v- Dawson has recently been followed in the Circuit Court, The case was heard in camera. Further details will be provided if and when available. • UN I VERS I TY OF THE PAC I F IC Mc GEORGE S CHOOL OF L AW International Opportunities For Practitioners McGeorge School of Law will offer four summer seminars for lawyers in 1987 in England, Scotland, Austria, and Hungary. The London Institute on Comparative Advocacy (7-12 June, 1987) provides instruction on the English legal system and litigation training in barristers' chambers. The Edinburgh Institute on International Business Transactions (28 June - 21 July, 1987) offers courses on International Business Transactions, International Taxation, International Commercial Agreements, and EEC Law. The Salzburg Institute on International Legal Studies ( 2 - 1 5 July, 1987) provides courses on Conflict of Laws, International Trade and Development, Comparative Criminal Procedure, International Business Lawyer, and International Trade and Finance. The Budapest/Vienna Institute on East/West Law and Relations (25 July - 4 August, 1987) emphasizes exploration of trading opportunities, transaction strategies, and business contacts between the West and East Europe. The law school also will offer an expanded internship program (August-December, 1987), providing training opportunities in Asia as well as Europe for young lawyers. Information on the programs is available from McGeorge School of Law, 3200 5th Avenue, Sacramento, California 95817, Telephone (916) 739-7195, Telex 383890 MCGEORGE.

45. Ibid at p.202-3. Note, however, the dissenting judgment of Hederman J. Further examples of the court's method of interpreting taxation statutes are: Charles McCann Ltd. -v- O'Culachain (Inspector of Taxes), (High Court, unreported, Carroll J.). In this case Carroll J. followed the canons of interpretation stated in Kiernan's case and held that the process of ripening bananas was not a manu- facturing process within Part IV, F.A., 1980. See, also, Cronin (Inspector of Taxes) -v- Strand Dairy Ltd. (H.C., unreported, 18 December, 1985, Murphy J.); Navan Carpets -v- Inspector of Taxes Court, unreported, 5 November, 1985, Costello J.); Bairead (Inspector of Taxes) -v- Maxwells of Donegal Ltd. (H) C., unreported, 19 November, 1985, Carroll J.); Cronin (Inspec- tor of Taxes) -v- Lunham Bros. (High Court, unreported, 19 June, 1985, Carroll .1.). 49. See, also, Jacob International -v- O'Cleirigh (Inspector of Taxes) [1985] 5 I.L.R.M. 651, where it was held that I.D.A. grants were liable to Corporation Tax and the question of liability was to be (at p.653) ". . . answered by investigating the true nature and purpose of the payments and then, regardless of how they may have been dealt with by the Respondent, deciding whether they fall into Revenue or Capital". 50. [1983] I.L.R.M. 34 (H.Ct.), [1984] I.L.R.M. 406 (S.Ct.). See, also, K. Corrigan at [1983] 5 D.U.L.J. (N.S.) 129. Anti-avoidance legislation was introduced in section 9, F.A., 1984. 51. S.l (i) defines body of persons as "any body politic, corporate or collegiate, and any company, fraternity, fellowship and society of persons, whether corporate or not corporate". 52. See Newstead -v- Frost [1980] S.T.C. 123. 53. [1984] LL.R.M.406at p.407. 54. Ibid &X p.408. 55. [1986] 6 I.L.R.M. 116. 56. Ibid at p. 120. 57. 36 T.C. 293 [1953] Ch. 782 and 47 T.C. 580, respectively. In Sharkey, the House of Lords stated that where trading stock was disposed of otherwise than by way of trade, the market value should be credited in the accounts for tax purposes. In Petrotim, a share dealing company sold investments at a loss to its parent company and its fellow subsidiary as part of a complex dividend stripping operation, and claimed the loss as a trading loss. The English Court of Appeal applied Sharkey to the sale of the parent, and also held that the sale to the subsidiary was not a true trading transaction because a sale from one associated company to another at a gross undervalue could not be said to be in the ordinary course of the company's trade. In Lupton\ the House of Lords held that complex dividend stripping transactions could not be regarded as share dealing because they were wholly artificial devices remote from trade to secure tax advantages. 58. [1986] 6 I.L.R.M. 116 at p. 122. 59. H.Ct., unreported, 14 May, 1985, Carroll J. 60. 41 T.C. 389 at p.407. Ibid at p.5 of the judgment. 61. [1986] 6 I.L.R.M. 37. 62. Stokes, Kennedy, Crowley. 63. Ibida\ p.41. 64. Ibid atp.39. 65. Ibid, at p.41. 66. Ibid at p.41. 67. High Court, unreported, 11 March 1986, Barrington J. 68. Ibid a\ p.73-4. 69. 9 T.C. 561. The other cases considered were: Gresham Life Assurance Society -v- Bishop, 4 T.C. 464; Scottish Widows Fund Life Assurance Society -v- Farmer, 5 T.C. 502; Pitcher -v- Logan [1914] I J S.R. N.S.W. 24. 70. High Court, unreported, 11 March, 1986, Barrington J. at p. 13. 71. Ibid ax p. 14. 72. Ibid. 73. See Revenue Commissioners -v- Donnelly [1983] I.L.R.M. 329; InRc. Hibernian Transport Co. Ltd. [1984] I.L.R.M. 583 where the Court held that Capital Gains Tax and Corporation Tax, respectively, were not a "necessary disbursement" of a liquidator under Rule 129 (I) Winding Up Rules 1966. (See, however, Section 56 F.A. 1983). 46. High Court, unreported, 18 July, 1984, Finlay P. 47. High Court, unreported, 19 April, Carroll J. 48. Ibid at p. 7 of her judgment.

230