The appeal commissioner, Mr Ronan Kelly, is believed to have dismissed the £2 million gift tax assessment raised against the former Taoiseach, Mr Haughey, because the Revenue did not adequately identify who gave the gift.
The Revenue, in making its case, relied solely on the McCracken report which found Mr Ben Dunne gave Mr Haughey £1.3 million. During the course of the McCracken tribunal Mr Haughey made statements in which he accepted Mr Dunne had given him the money.
However, technically, the money came from companies owned by various shareholders, including Mr Dunne. Also, much of the money came from profitable operations in the Far East which are linked to Dunnes Stores but are run by companies not legally part of the Dunnes Stores group. The ownership of these companies is not outlined in the McCracken report.
While these facts were not important for the purposes of the McCracken tribunal, counsel for Mr Haughey argued before the appeal commissioner that under the terms of Capital Acquisitions Tax law, the "disponer", or person who gave a gift, must be identified. Mr Kelly is believed to have agreed with this and dismissed the assessment against Mr Haughey.
It is understood the three bank drafts for £70,000 sterling each, which Mr Dunne gave in a spontaneous gesture to Mr Haughey during a visit to Mr Haughey's home in Kinsealy, Co Dublin, in November 1991, were linked to the Far East operations.
Mr Dunne told the tribunal he had the drafts drawn up in fictitious names "for personal reasons". The tribunal did not inquire into what these reasons were.
Mr Dunne spontaneously decided to give the three drafts to the then Taoiseach because he thought Mr Haughey looked "down and depressed". Mr Haughey responded: "Thank you, big fellow", the tribunal was told.
Schedules in the McCracken report show a £471,000 sterling payment made to Mr Haughey in August 1988 came from the account of a company called Tse Kam Ming, which it is understood is a Hong Kong-based company involved in the Far East operations linked to Dunnes Stores.
The account was in a Swiss trust company called Equifex Trust Corporation AG. A further payment of £150,000 sterling in May 1989 came from the same source.
A payment of £200,000 sterling in March 1990, came from an account in the name of Tutbury Ltd, in Rea Bros bank, in the Isle of Man.
The three bank drafts given to Mr Haughey in November 1991, came from this account.
The other payment to Mr Haughey examined by the McCracken tribunal, of £182,630 sterling, was drawn on a Dunnes Stores (Bangor) Ltd account at the Newry branch of Ulster Bank. The payment was made in November/ December 1987.
The origin of gifts which may be subjected to Capital Acquisitions Tax is important because, in certain circumstances, foreign assets given by "disponers" domiciled abroad may not be liable for tax.
The decision of Mr Kelly is now to be appealed by the Revenue to the Circuit Court and the case will be reheard. The Revenue will have an opportunity to produce more evidence as to the origin of the funds which Mr Haughey told the McCracken tribunal he accepted he had received.
