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Counting days in UK for residence tests. By Richard Mannion

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22nd Nov 2006
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The case of Gaines-Cooper v Revenue and Customs Commissioners has raised considerable interest in the press. It concerns a multi-millionaire who found to his cost that HMRC publishes one set of rules on UK temporary residency but argues questions of residency on an entirely different basis in the courts.

Richard Mannion, national tax director of Smith and Williamson, shares his views on the decision as it currently stands.

The case of Gaines-Cooper v Revenue and Customs Commissioners has raised considerable interest in the press.

Probably the main point of interest in this case concerns the Revenue’s assertion that the guidance in booklet IR20 did not apply in the case of Mr Gaines-Cooper.

Para 1.2 of the booklet says “the normal rule is that days of arrival in and departure from the UK are ignored in counting the days spent in the UK, in all the various cases where calculations have to be made to determine your residence position……. this rule is not relevant to the concessionary split year treatment”.

The Special Commissioners decision states “the appellant’s figures were based upon the principles in the Inland Revenue’s publication “IR20: Residents and non residents – Liability to tax in the United Kingdom”. That is, the appellant’s figures ignored the dates of arrival and departure and they also ignored unusual events. As far as the days of arrival and departure are concerned, many of the days which the appellant spent in the UK were single days (where arrival was one day and departure on the next) which, therefore, were not included at all in his figures… in this appeal we must apply the law rather than the provisions of IR20. We make findings about the time spent by the appellant in both the UK and the Seychelles as such time is one factor to be taken into account in considering domicile, residence and ordinary residence.”

The decision continues “the Revenue argued that if one ignored both the dates of arrival and departure, and also single days, a distorted picture emerged. For example, if the appellant arrived in the UK on one day and left on the next he recorded that no days were spent in the UK. The Revenue argued that such a visit should count as one day”.

As a Special Commissioners’ decision this case has no binding precedence and unfortunately leaves many questions unanswered, for example:

If an individual arrives in the UK on a Monday and leaves on a Tuesday it appears HMRC are arguing that that should count as one day in UK. What about the case where someone arrives on a Monday and leaves on a Thursday? Is that two days in UK or three?

Do HMRC plan to change booklet IR20?
The case of Wilkie v IRC (1952) established the principle that in deciding whether a temporary visitor had actually resided in the UK for a period equal to six months, periods of time in terms of hours were relevant for days of less than total residence. In a letter dated 4 March 1983 to the CCAB the Inland Revenue said “in view of the difficulties which would arise in following this strict rule it was decided to regard 183 days as equal to six months and to disregard days of arrival and departure in making the count”. Are the Revenue now restricting this rule to “temporary visitor” decisions rather than to all residence questions?

It is understood that the case is expected to go to appeal on both the residence and domicile issues

Related link
Detailed case report

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By AnonymousUser
25th Nov 2006 18:07

IM 50
The CCAB comment after Wilkie is reproduced in Inspectors Manual para 50, but like the comment Richard reproduces, it is specific to the 183 day rule.. The next para in IM is 130, the one before is something like IM43. There is, IIRC, no statement in IM (at least in the public pages) about the 91 day test. I assume it is in paras 44-49, and that it gives further details on how to apply it in a range of cases.

Come to think of it, it is presumably possible to make a Freedom of Information request about whether the paragraphs exist, even if they aren't going to release what they say...

Mike Truman

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