A legal amendment that was made during the COVID-19 pandemic allowing the witnessing of wills to take place via videoconferencing has officially expired. As of 31 January 2024, the...Continue reading
HM Revenue and Customs (HMRC) have won yet another victory in a tax case in circumstances in which the facts were such that it is very unlikely indeed that a challenge would have been made just a few years ago.
The case involved a doctor who bought a house in France in 2000. He had lived abroad on and off for several years, then in 1998, after divorcing his wife, he went to live in France. In 1999, he moved to Spain, then decided to live in the USA for a while. He retained his house in the UK, however. When he started living in France in 2000, he gave the address of his retained property in the UK as his postal address.
The man owned a further property in York and also bought another house in the UK in 2000 near to where his children lived. He claimed to be non-resident in the UK as far as liability to UK taxation was concerned from the tax year 2000/1 onwards.
The man sold his UK properties in 2000/1, which led to the realisation of considerable capital gains.
In 2005, he sold his house in France, declaring to the French authorities that he was not resident in France and that his country of residence was the UK. He paid no income tax in France.
During the tax years from 2000/1 to 2003/4, he spent a total of 103 days in the UK.
HM Revenue and Customs (HMRC) opened an enquiry into his 2000/1 tax return and raised an assessment to Capital Gains Tax (CGT) of nearly £29,000, although this sum was later reduced to £21,000.
Despite the man’s lack of physical presence in the UK, HMRC assembled a great deal of evidence, aided by the cooperation of the French tax authorities, to show to the satisfaction of the First-Tier Tribunal that he had not formed a permanent intention to reside abroad and had retained his ties with the UK.
The CGT assessments were ordered to stand.
What is important about this case, like the Gaines-Cooper case decided last September, is that it shows that HMRC will make their case on the basis of facts about intentions and ‘connectedness’ to the UK. It also shows the increasing willingness of HMRC to assemble factual (if circumstantial) evidence where there is a moderate amount of tax at stake, and to fight their corner ever more strongly. It also illustrates the increasingly close cooperation between the tax authorities of different countries.