Issue link: https://maltatoday.uberflip.com/i/1130632
9 maltatoday | SUNDAY • 16 JUNE 2019 was not €10,000... but fourteen times that value: €146,250. The Commissioner had no option other than to proceed with the assessment, and is- sued Gaffarena with a €8,178 bill for unpaid tax. Gaffarenaobjected, despatch- ing his own architect, Giorgio Schembri, who insisted the value of each share was €3,500. But a second architect was appointed by the CIR to make yet another valuation, who ar- rived at the total value of €21,000. Architect Anthony Robinson said that while the premises were finished to the high standard of a "re- nowned British high street brand" and was in an excel- lent commercial location, there were uncertainties and lack of control over the property, so the real open market value of the share was a fraction of the actual amount. Gaffarena once again ob- jected to the new assessment, leading the CIR to now appoint two more architects, Hector Zammit and Konrad Thake, who arrived at a third figure of €80,550– a tax bill of€4,236for the property-richGaffarena. The Commissioner de- fended its valuations in court, whereGaffarenais now object- ing to the tax bill he is being asked to pay. "We had to safeguard the credibility of the depart- ment… because the depart- ment is grilled by the Public Accounts Committee. This time the department went beyond the norm, because this case appears to be slight- ly more sensitive than oth- ers, and appointed two archi- tects whom we have absolute faith in,to make a joint valua- tion," CIR representative Alex Frendo told the court. Frendo said both archi- tects, Cacopardo and Robin- son, whom the CIR had first appointed to carry out the primary evaluations, stood by their estimates when con- fronted about the discrepancy in how they had valued the property. "Having two experts work- ing on a joint valuation gave us comfort on such a sensi- tive case... sensitive because on the one hand we had Ca- copardo's inflated estimate and [Robinson's] far lower estimate, which caused a dis- crepancy in value," Frendo said. Architect Konrad Thakelater gave his own explanation for the €80,000 valuation, saying that commercial space in Slie- ma was conservatively esti- mated at €250 per square me- tre. The M&S space had a total floor area of 358sq.m on each storey. Thake therefore multiplied the standard rental value by the floor area, for each of the remaining twelve years of the lease, obtaining the total figure of €1.07 million, or €26,850 for each of the 40 shares on the lease. Another court-appointed ar- chitect, Anton Zammit, how- ever, insisted the two archi- tectswereincorrect toimpute the value of the retail space be- ing run by Marks &Spencer. "The principle is incorrect," Anton Zammit told the court in his report in February 2019, "because they are assuming profits from the rent, and [Gaf- farena] is being taxed from the moment of acquisition not just on the value of the share, but also on the revenue he might have from the rent... "Commercial property must have a return on investment of around 6% on the value of the investment. But this principle applies when the property is freehold and in perpetuity, not when it is a 12-year lease of a small share of the property." While Zammit said that at €250 rent per square metre, a one-fortieth share of the lease amounted to €2,240 every year, or €26,880 for the re- maining 12 years, at 6% return on investment the 3/40 share would be valued at €40,074. The Gaffarena family The Gaffarenas were once considered to be supportive donors of the Nationalist Party until they fell out over a justi- fied enforcementaction by the Planning Authority, during the Nationalist administration, to prevent them from building an illegal storey on their fuel ser- vice station. When the Old Mint Street scandal struck, planning min- ister Michael Falzon resigned after it resulted that his staff had gone out of its way to ac- commodate Gaffarena's bid to have just his 50% share of the Old Mint Street palazzo, expropriated, and paid with cash and a series of lands that were beneficial to his business interests. Among these was the Sliema shop, then owned by the State, that was beneath the Manuel Dimech Street house he had acquired in 2013. Heneededfull ownership so as to build an apartment complex. The controversial expropria- tion even saw Prime Minister Joseph Muscat filing a court case in his own capacity to have the decision reversed, and prompted an entire over- haul of the Lands Department to be turned into a regulator with a board of governors and ensure full scrutiny of its deci- sions. mvella@mediatoday.com.mt NEWS Opera onal Programme II - European Structural and Investment Funds 2014-2020 "Inves ng in human capital to create more opportuni es and promote the well-being of society" Project part-financed by the European Social Fund Co-financing rate: 80% European Union; 20% Na onal Funds For more information +356 2545 6831 | +356 2545 6886 deputyprimeministercms.gov.mt/en/ahcs/Pages/overview.aspx Ministry for HealtH Impacting Human Health… A cAreer As A Genetic counsellor ESF 02.053 Developing Allied Health Capacity to Sustain Health Care Needs Genetic Counselling combines medical genetics and counselling to help people understand the genetic components and implicationsof disease. eu funded project to follow a Master's Degree abroad leading to a career in Genetic Counselling agree on Gaffarena's Marks & Spencer Ground lease estimate Architect 1: €146,250 Architect 2: €21,000 Architects 3 &4: €80,550 Architect 5: €40,074 Gaffarena's architect: €13,500 The Commissioner for Inland Revenue sent various architects to establish what the real value of Marco Gaffarena's share of the M&S emphyteusis is, based on the commercial value of the operation currently in place at the location. Gaffarena has challenged the assessments in a court case