The Supreme Court handed down its judgement in the O'Flynn Construction case last month. The case concerned the general anti-avoidance rule in section 811 of the Taxes Consolidation Act 1997, and a tax planning scheme involving the use of ESR reserves. The Court found in favour of Revenue.

This case had last featured in the High Court in 2006; the Supreme Court hearing was in February of this year, and the judgments handed down last month. It's worth pointing out that the actual transactions which were the focus of the case took place almost 20 years ago, in 1992.

We understand that the decision of the Supreme Court Justices was not a unanimous decision.

However, aside from the immediate impact to the taxpayers concerned, two conclusions can safely be drawn. The first is that this decision, as it affirms the operation of section 811, gives that anti-avoidance rule an extended lease of life. Secondly, if it takes almost 20 years for our Appeals process to come to a final resolution in a tax case, however complex, there is clearly something very wrong with the way we manage tax appeals.

This makes the recent announcement by Minister Brian Hayes that he proposes to launch consultations towards a review of the Appeals Process in 2012 all the more necessary and timely.

The Supreme Court's judgment is summarised in this issue of tax.point on here.