The Gazette 1989

SEPTEMBER 1989

GAZETTE.

sons engaged in the business. This applies to situations where the uncle is unmarried as the wording is " any" spouse. It would appear that these pre- conditions were introducted for two reasons: firstly, because the Revenue Commissioners felt that the principle in the AE case was too wide and, secondly, to provide for the decision of Judge Sheridan in the case of D.R. -v- The Revenue Commissioners. 11 In that case the taxpayer Appe l l ant was the remainderman of a life settlement. The settlor was his uncle and the life tenant was the uncle's spouse. After the death of the uncle the nephew helped in the business and, when the spouse became incapaci- tated, he effectively took over the business. One of the questions which the Circuit Court had to decide was whether the nephew was working substantially on a full- time basis. The facts were that the business was a small rural public house. Generally in summer it was open during normal licensing hours and in winter it was open from 8.00 p.m. to closing time. The taxpayer had a full-time job at a local

ness would have collapsed but for her activites. The Judge therefore concluded that she worked sub- stantially on a full-time basis in her uncle's business so as to fall within the terms of the relief. Under Section 83 FA 1989, the nephew must now work a mini- mum number of hours per week in the business. This requirement is a precondition to the application of Judge Sheridan's test. Paragraph 9 (2) differentiates between two situations, firstly where the uncle is the owner and there are a number of other employees or helpers and secondly, where the uncle, " a n y " spouse and the nephew are the sole workers in the business. The time requirement in the latter is less than in the former. The primary requirement now is that a nephew must work more than 24 hours a week for the disponer or the company, at the place where the business is carried on. An example of this is an em- ployee of an uncle's company. This requirement is reduced to 15 hours in circumstances where the uncle and " an y" spouse of the disponer and the nephew are the sole per-

hospital, but worked in the pub most nights and at weekends. During the summertime, when the pub was open during the day, there was another employee to help. The nephew was effectively running the business. However, the Judge held, in an ex tempore judgment that because the other employee was working in the business, the taxpayer was not working sub- stantially on a full-time basis. It was argued on behalf of the taxpayer that he was assisting substantially on a full-time basis, particularly having regard to the aunt's in- capacity. This argument was rejected by the Court. This decision may be compared with the decision in the AE case where the taxpayer Appellant spent less time but did all the work and where there were no other em- ployees. The decision in the D.R. Case suggested that a taxpayer could not have alternative em- ployment and be a favourite nephew at the same time. Aside from the question of whether a remainderman can be a favourite nephew (which is considered below) under Paragraph 9 as newly

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