Mr. Charlie Phelan:

I will split the questions a little and ask Mr. Walsh to respond to some parts of them.

First, there is no doubt at all in the mind of the Revenue Commissioners that this amount of money should be included in the accounts and subject to income tax. The Revenue Commissioners would not engage lightly in trying to have a test case heard to verify something.

There are many cases around the barter position of goods, including a very old one involving gold in exchange for money. That money is taxable. I can provide some detail of the case law for treating these shares as income. We do not need take a test case to verify that. Let there be no doubt about it that the Revenue Commissioners are fully convinced at the highest level in the organisation that this amount of income is subject to income tax.

As regards, capital gains tax, CGT, there is no doubt that CGT is due on the sale of a share but the base price - the price at which it is deemed to have been acquired - and not the €1.25 value must be included in the income tax returns. As regards the specific case in question I will ask my colleague, Mr. Paul Walsh, to respond on the case law in that regard and to elaborate further on what I said.