A butcher has asked the High Court to dismiss a demand by Revenue for a €187,000 inheritance tax bill because he says he never received notices and demands to pay it.
John Herterich, who Revenue says owns and operates Fred Herterich and Sons pork butchers in Lombard St, Galway, is being pursued for summary judgment for €187,821 in capital acquisitions tax, including some €55,000 in interest.
He says the demand significantly overvalued the inheritance he received and that the tax assessment should have been sent to his home in Shangort, Clybaun, Galway, not his place of employment, the butcher's shop.
The bill arises out of the will of his late aunt Carmel Herterich, who left the Lombard St property to him and applies to the years 2011 to 2012, the court heard.
Revenue assessed the property’s value at €480,000 which meant an inheritance tax bill of €132,000. By the time a final demand was served on him in 2018 interest had brought it up to €187,000.
High Court proceedings by Revenue for summary judgment followed after it was not paid.
He opposed the summary judgment application and said the case against him should be struck out or alternatively he was entitled to a full hearing.
Ms Justice Mary Rose Gearty today ruled he was entitled to a plenary hearing so the facts of the case can be “teased out".
Paul Brady, for Revenue, said earlier Mr Herterich asserted he not only did he not receive various correspondence related to the notice of assessment of tax, but he also claimed the value of the property was significantly overstated because it did not take into account various burdens which were also on his late aunt's estate.
Mr Herterich's own valuer put the updated value at €125,000, counsel said. He had also claimed his aunt's will stated he had a right to operate the butcher's as an employee up to the age of 65 and he said this had a significant impact on the title to the property as it meant it was not possible to borrow using it as security.
As a result of not receiving notices, Mr Herterich claims, he was deprived of his right to appeal the tax assessment.
Mr Brady said his central argument was they were sent to his place of employment, the shop in Lombard St, when they should have been sent to his home in Clybaun.
However, counsel said, the notices were sent to the butcher's shop and were not returned. Notices were also sent to another address in Galway, Marine View, and these were returned.
Anna Shanley, for Mr Herterich, said there can only be default on a tax bill where there was valid service of the assessment and the court should dismiss Revenue's application.
Failing that, there should be a plenary hearing, she said. Her client was being prejudiced by the accruing interest.
It was undisputed he did inherit the property and there was likely to be a capital acquisitions bill but it had to be in the context of the various burdens on and actual value of the inherited estate, she said.
Revenue had also not explained why no effort was made to send it to his home address when this was clearly printed on his inland revenue certificate, she said.
Ms Justice Gearty said she was not going to dismiss the case when the facts have not yet been teased out and she therefore remitted it for plenary hearing.