The Gazette 1989

344 / 482

GAZETTE. SEPTEMBER 1989
IAGS Irish Assessment and Guidance Service
i
\ -p Skerries Medical Centre, Strand Street, Skerries, Co. Dublin. \ // Telephone: (01)491717, 490420, 490429 Fax:(046)28852
V Psychological, Educational and Career Consultants
IAGS FOR PROFESSIONAL APPRAISAL OF EDUCATION
AND CAREER PROSPECTS IN PERSONAL INJURY CASES
was considered and given a wide
interpretation in the AE case, where
it was of central importance.
In that case the taxpayer had
received a gift of her uncle's farm.
Prior to the gift the land had not
been farmed actively by the uncle,
but had been let to a third party as
grazing for cattle. Under local cus-
tom, incorporated in the grazing
agreement, the uncle was respons-
ible for herding the cattle each day
and for reporting any eventualities.
The taxpayer performed her uncle's
duties and visited the farm twice a
day to herd the cattle, to examine
the fencing and to check that the
cattle were safe. Any farm pofits
and the letting monies were pay-
able solely to the uncle.
The Revenue Commissioners
argued that the taxpayer could not
avail of the relief under the old
Paragraph 9 on the basis that her
uncle's letting agreement did not
cons t i t u te a business. Judge
Sheridan did not agree. He looked
at the situation in the light of the
fact that the disponer was an6
"ageing man living alone, unable,
through advancing years, to engage
in husbandry or agriculture with the
same intensity as formerly." He
stated that a failing or, indeed,
failed business is nevertheless a
business and that profit or an
intention to make a business was
not an essential part of the legal
definition of the trade or business.
He adopted the definition of Lindley
L.J. in the case of Rolls -v- Miller: 1
". . . the word (business) means
almost anything wh i ch is an
occupation as distinguished from a
pleasure - anything which is an
occupation or duty which requires
attention as a business." He noted
that the term business could not
refer to isolated transactions and
that it would have to be 8 "habitu-
ally and systematically exercised".
In the case before him, Judge
Sheridan categorised the business
as: 9" . . . letting of the farm,
particularly with regard to the
custom of the area which required
the person who let out the farm to
engage in herding the stock from
the person taking the land".
Section 83 FA 1989 does not
define "business" and accordingly
it wou ld appear t hat Judge
Sheridan's definition remains un-
altered. The definition is capable of
encompassing a wide range of
activities. Whether or not a particu-
lar activity qualifies for the relief
will depend on the circumstances
of each case.
(2) Shares in a private trading
company
The assets can also comprise
shares in a company. Company is
defined as a private trading com-
pany controlled by the uncle of
which the uncle is a director.
"Pivate Trading Company" is
defined by Section 16 Sub-Section
(2) CATA 1976 as a private com-
pany which is not a private non-
trading company within Section 17
CATA, 1976. Broadly speaking, a
private company is a company with
not more than 50 shareholders,
which has not issued shares as a
result of a public invitation and
which is under the control of not
more than five persons. Section 17
defines a private non-trading com-
pany as a private company the
income of which consists wholly or
mainly of investment income and
the property of which consists
wholly or mainly of property from
which investment income is de-
rived. Effectively, therefore, a
private trading company means a
company carrying on a trade, busi-
ness or profession.
The company must be controlled
by the uncle. This is defined in
Paragraph 9 as a company under
the control of either the uncle, his
nominees, or the trustees of a
settlement made by him. Control is
defined by Section 16 sub-section
(4) CATA 1976 and generally in-
cludes having greater than 50% of
the voting power, or control of the
Board of Directors, or an entitle-
ment to more than 50% of the
dividends, or to 50% of the
nominal value of the shares in the
company.
These rules in Paragraph 9
regarding control are similar to the
rules for private companies in the
Capital Acquisitions Tax Act. As
originally drafted, Paragraph 9
referred to "office or employment"
of the uncle and to shares in a
company carrying on a trade,
business or profession. The old
rules were, to say the least, difficult
to interpret and the new provisions
are welcome.
"Substantially on a full-time
basis." The nephew must carry on
or assist in carrying on the trade,
business or profession "substanti-
ally on a full-time basis". Sub-
stantially on a full-time basis was
not defined in paragraph 9 as
originally enacted. It was con-
sidered in detail by Judge Sheridan
in the AE case, where it was given
a broad interpretation.
In that case Judge Sheridan
pointed out that the term was not
a term of art. In the absence of
authority he proposed the following
definition: 10 ". . . the continued
presence of a niece or nephew on
a day to day basis whereby their
labour (including expertise) is put at
the disposal of the disponer
whereby material benefit is con-
ferred on the disponer's business".
He emphasised that the terms of
the relief did not require that the
disponer be in loco parentis to the
beneficiary, nor that the nephew
should live wi th the disponer.
In the case before him, Judge
Sheridan noted that the taxpayer
did the farm work for her uncle, any
housework and more or less what
he asked her to do. She herded the
cattle each day, checking to see
that all was in order and looked
after the management of the farm
and buildings. The taxpayer also did
a certain amount of fencing.
Because she was involved in raising
her own family, she could not take
a job elsewhere.
The Judge emphasised that the
management of the land was the
taxpayer's prime concern apart
from her family and that she
attempted to add material value to
the land. He said that she did work
of lasting value and that the busi-
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