THE REVENUE Commissioners have lost a High Court challenge to a decision that millionaire developer Robert "Pino" Harris is entitled to some €9 million in income tax refunds over expenditure on the luxury yacht, the Christina O.
The yacht was once owned by Greek shipping magnate Aristotle Onassis and was bought for €65 million in 2000 by a partnership including Mr Harris.
The court proceedings arose after Mr Harris claimed certain income tax reliefs arising from his membership of a limited partnership registered under the law of the Cook Islands - the Christina O Limited (CL) Partnership. He sought tax reliefs for the year ending April 5th, 2001, and for periods ending December 2001 and December 2002.
Ms Justice Mary Laffoy yesterday ruled that Mr Harris was entitled to the refunds, which have already been paid. She ruled that he could not be defined as a limited partner subject to restrictions on reliefs set out in section 1013 of the Taxes Consolidation Act 1997.
The judge was ruling on the Revenue's appeal against a 2004 decision of the Appeal Commissioners that Mr Harris was entitled to set off capital allowances and interest payments arising from the partnership against his entire income.
The Appeal Commissioners determined that Mr Harris was entitled to refunds of €9.12 million.
In her detailed judgment on the Revenue appeal, which centred on interpretation of provisions of the Taxes Consolidation Act, Ms Justice Laffoy ruled that Mr Harris was not a limited partner as defined by the relevant provisions of the Taxes Consolidation Act.
She found Mr Harris's liability under the CL partnership was not unlimited and the section of the Tax Consolidation Act restricting tax relief did not apply to him.
The Revenue had said it had no problem that Mr Harris, an Irish resident and taxpayer, could offset losses against the Cook Islands partnership. It did have a problem with his being able to offset the losses against his income.
When Mr Harris became involved with the Christina O partnership, he invested €144,000 and loaned €14.3 million, giving him a share of just over 4 per cent of the CL Partnership. He claimed the partnership was established for the purpose of acquiring and operating high class luxury yachts.
In his tax-return filed in January 2002, Mr Harris claimed relief for trading losses, capital allowances and interest arising from the purchase and refurbishment of the Christina O by the partnership.
