Stories
The €1.4 million owing in stamp duty would buy four averagely priced Dublin homes. Not that there is anything average about Walford, the Shrewsbury Road pile that has held the questionable honour of being Ireland’s most expensive home for 15 years.
Acquired in 2005 for a record €58 million by Carlow born developer Sean Dunne and later put in trust for his wife Gayle Killilea, the Dublin 4 period property was the ultimate Celtic Tiger trophy.
Few buys better epitomise the era. Or what followed.
In 2013, the year that Dunne, the so-called “Baron of Ballsbridge”, went bankrupt in Ireland as Ulster Bank pursued him for loans of €164 million, the luxury house was transferred to a Cypriot based entity Yesreb for €14 million. The new owners were a mystery until court proceedings in 2017 determined that John Dunne, the son of Sean Dunne’s first marriage, was the beneficial owner of the special purpose vehicle (SPV).
It was not an arm’s length transaction. Killilea stated in the same court case that she had agreed to lend Yesreb €15 million to complete the purchase of Walford. The title deeds to the house were put in escrow as security against the loan which was to be repaid five years later.
On foot of the sale in 2013, Yesreb made a self-assessed stamp duty return of €270,000, claiming the purchase was subject to sub-sale tax relief under the Stamp Duty Consolidation Act 1999.
A sub-sale involves a chain of sales around a given property but with only one conveyance from the original vendor to the final purchaser. For stamp duty purposes, certain conditions apply in order for a transaction to qualify as a sub-sale. Revenue took the view the Walford deal didn’t make the cut and assessed that €1.4 million was still due and owing in tax.
The dispute finally went before a tax appeals commissioner who ruled against Yesreb last month, two days before Christmas.
The case was technical in nature, revolving around the criteria required to attract sub-sale tax relief.
Yesreb relied on evidence that while Walford was sold in 2005, the conveyancing on the property was not executed. The firm argued this meant Sean Dunne retained a contractual interest in Walford and was a party to the 2013 sub-sale. They argued this continuity of ownership meant the deal qualified for stamp duty relief.
The Tax Appeals Commission’s findings on the €1.4 million owing in stamp duty may also be complicated by the fact Walford has changed hands
The Appeals Commission disagreed. It found that by 2013, the developer no longer had a legal or beneficial interest in Walford. The Commissioner relied on evidence, including a handwritten declaration dated July 23, 2005 (three weeks after Dunne signed for Walford) that the property was being held in trust for Dunne’s wife Gayle Killilea. The legal consequence of the declaration of trust was that Dunne had divested himself of any interest in the residence.
The Commissioner’s reliance on the declaration of trust is interesting in light of findings made by a US jury last summer in a five-week civil action involving Gayle Killilea. The court in New Haven, Connecticut found Dunne had fraudulently transferred Walford and some other assets to his wife while he was going broke, in order to evade his creditors.
Killilea was directed to pay US bankruptcy official Richard Coan $18.1 million. The allegations have always been denied by the Dunnes.
The Tax Appeals Commission’s findings on the €1.4 million owing in stamp duty may also be complicated by the fact Walford has changed hands again.
In late 2016, Yesreb sold the 1.77-acre property for €14.2 million to Celtic Trustees, a trust linked to billionaire financier Dermot Desmond.
The deal was not without controversy. Desmond is suing the Insolvency Service of Ireland and Dunne’s bankruptcy official over the alleged leaking to the media of confidential details around the sale agreement. That case is due to be heard this year.
Walford itself is facing more than a facelift.
Built in 1902, the Edwardian red brick is not a protected structure. The house has been described as being in the ‘Arts and Crafts’ style, an architectural movement that grew in the nineteenth-century as a reaction to the industrial revolution. The homely traditional aesthetic favoured natural tones, native materials and simplicity rendered in handmade tiles, metalwork and exposed beams.
For years, the property has lain empty.
Last year the Desmond backed trust attained planning permission to rip down the three-storey house and build a 17,168 sq ft mansion in its place.
Based on the planning application lodged by Celtic Trustees, it’s hard to imagine how one house could ever have generated so much fuss. It finds: “Dublin City Council have determined, quite correctly and over the period of three development plans, that this building is not worthy of Protected Structure status. It is an early twentieth-century suburban house of a quite ordinary quality which contributes only in a very limited way to the character of the streetscape, primarily through its granite boundary wall, boundary planting, front garden trees and glimpses of the façade and roof material from the road.”
