When a non-resident of the UK visited the UK with a view to becoming resident here, little did he realise that the decision would cost him nearly £100,000 in tax.

The man was a resident of Japan from September 1997 onwards and had also been non-resident in the UK for five of the eight years prior to 1997.

He visited the UK between 17 and 30 July 2005. On 12 August 2005, he sold shares which led to a considerable capital gain. HM Revenue and Customs argued that his visit had made him UK resident during the 2005/2006 tax year. Because the disposal of the shares occurred in that year, he was liable to UK Capital Gains Tax on the profit on the sale of the shares.

In 2005, his employment with his then employer in Japan was ceasing and he arranged for his property to be shipped to the UK. The man and his family left Japan in July 2005 and were on holiday in Italy when the shares were sold. The man’s Japanese residency permit was cancelled when he left.

He had arranged for the purchase of a property in Norfolk and his daughters had places in a local school there.

He claimed that it was probable that he would go to work in Hong Kong, but the First-tier Tribunal, after considering his domestic arrangements in detail, concluded that as a matter of fact his visit to the UK was not intended to be temporary but was preparatory to a likely move back to the UK.

He was therefore resident in the UK and the tax assessment stood.

When making decisions about matters such as residence, the Tribunal will take all relevant evidence, including evidence of intention, into account.

In this case, selling the shares several months earlier, in the previous tax year, would have meant that the argument over his tax status would not have arisen.


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