Gaines-Cooper Wins Right To Appeal

By ExpatBriefing.com Editorial 17 August, 2010

British-born tax exile Robert Gaines-Cooper has won the right to have his case heard in the UK Supreme Court in what will be the final chapter of a long-running legal battle with the UK tax man over his residence status for tax purposes.

Gaines-Cooper migrated to the Seychelles in 1976, and spent less than 91 days each year in the UK in accordance with non-domicile residency rules. He owns a house in England, which is occupied by his second wife and son. He keeps classic cars and a collection of paintings at the property, and sent his son to a British public school. He also had his will drawn up under English law.

However, a Court of Appeal judicial review hearing in February 2010 found in favor of HM Revenue and Customs (HMRC), after it was found that the Gaines-Cooper did not fully meet non-dom status requirements. Gaines-Cooper now faces a GBP30m tax bill dating back to 1993 unless his appeal to the UK's highest court succeeds.

It was Gaines-Cooper's links with England that led the Court of Appeal to find that the UK remained Gaines-Cooper’s “center of gravity of his life and interests” – a decision which has prompted tax experts to accuse HMRC and the courts of “moving the goalposts.” Accountancy firm PKF has since suggested that expats should take certain measures to “truly sever their ties with Blighty” to meet HMRC requirements, such as selling UK residential property or letting it out for at least 12 months; ensuring the property is not available for the expat’s own use when visiting the UK; to consider resigning from UK company directorships and disposing of UK business interests; selling any car owned in the UK; canceling UK credit cards; and canceling sports and social club memberships.

While Gaines-Cooper has been set back every step of the way towards the Supreme Court appeal, he is determined to fight on in an attempt to bring some much-needed clarity to the UK's domicile rules.

The Supreme Court's decision will be keenly watched by other Britons living abroad who are facing similar travails in interpreting HMRC's guidance on this issue.

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