The High Court has upheld a decision of a Revenue Appeal Commissioner who ruled businessman Denis O'Brien was not liable for almost €57m in capital gains tax.

The court had been asked to rule on a decision by a Revenue Appeal Commissioner that his permanent home in 2000 and 2001 was not in Ireland and he was therefore not liable for the tax.

The Inspector of Taxes disagreed with the commissioner's decision in 2003.

It meant Mr O'Brien did not have to pay capital gains tax of €56.8m on the €285m he received for his share in Esat Digifone when it was sold to British Telecom in 2000.

Ms Justice Mary Laffoy upheld the decision of the appeal commissioner.

The judge said he was correct in holding that a property in Ballsbridge was not a permanent home available to Mr O'Brien within the meaning of the Ireland/Portugal Double Taxation Convention.

The case arose over the purchase, in 2000, by Mr O'Brien of 6 Raglan Road, Ballsbridge.

The seven-bedroom detached period house was bought through a company, Partenay Ltd.

The Revenue accepted Mr O'Brien had moved with his family to Portugal in February 2000, but claimed he also had a permanent home available to him at that time in Raglan Road which, when he bought it, was habitable.

The Revenue had argued the Appeal Commissioner should have gone on to decide whether his personal and economic interests were closer to Ireland than to Portugal, thereby making him tax liable in accordance with the Ireland/Portugal Double Taxation Convention.

Mr O'Brien had employed a number of architectural and building experts to show the Raglan Road house was not habitable at the time and needed extensive renovation, not completed until 2002.

A builder and an engineer said parts of the house were dangerous.

Mr O'Brien argued that all the family's personal possessions were re-located to Portugal after they left their former home in Wellington Road in February 2000, which was immediately rented out and no longer available to the family.

Appeal Commissioner Ronan Kelly found Mr O'Brien and his family did not reside there prior to the tax year 2000/2001, that he had never put his "mark or stamp" on the property and it was not therefore a permanent home.

The sale closed in May 2000 and refurbishment works began in January 2001.

From February 2002, the O'Brien family used it during visits to Ireland until it was vacated by them in March 2003, the Appeal Commissioner was told.

Ms Justice Laffoy noted that when the house was purchased by a company on behalf of Mr O'Brien the kitchen units and Aga cooker had been removed.

It was the subject of extensive works and neither Mr O'Brien nor his wife resided in the house from the time it was acquired until two years later in February 2003 after the expiry of the tax year in question.

Having regard to those facts, she ruled the decision of the Appeal Commissioner was correct and the reasoning behind the arguments made by the Inspector of Taxes was fundamentally flawed.

A stay was placed on the award of costs in Mr O'Brien's favour pending any appeal by the Inspector of Taxes.