Property developer loses residency appeal

Freelance journalist
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A couple from Salford face a £600,000 tax bill after a tribunal found they were still UK residents despite moving to Portugal more than 10 years ago.

Stephen and Pauline Rumbelow left England after Mrs Rumbelow suffered a breakdown. The couple had hoped to spend their retirement in a villa they built for themselves in Silves, southern Portugal.

But a long-running dispute with HMRC [Rumbelow v commissioners for HMRC, TC03022] meant that they faced a tax bill of almost £600,000 (in income tax and capital gains tax) after a judge ruled that the UK farmhouse they owned remained "essentially a family home".

Stephen Rumbelow, who made his fortune in building and property development, was...

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Well worth a read that one.

its a huge case but it boils down to the defendant being unable to prove their location. 

Whether this is due to poor management of the case by the defendants or the plain fact that the proof - if produced - placed them in the UK is hard to say, the judge seems to be implying the later. 





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Residence abroad

The property developer who lost his case would been better off paying fees to a tax consultant who is familiar with the residence and ordinary residence rules that applied until 5th April 2013.

Without a full-time employment abroad and having accommodation permanently available in the UK for his own use whenever he and his wife returned from Portugal probably meant that he was resident in both countries in the tax years in question.  I wonder if he declared his income to the Portuguese Tax Department.

I live abroad but do not own a house in the UK even though I pop back from time to time to see the grandchildren.  The new statutory tests from 6th April 2013 are interesting and will make life more certain for some people as everyone will fit into a defined category.

Guy Wilson

Chartered Certified Accountant



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were that overjoyed at retiring to Portugal's sunny climate that they decided to not only retain their former residence but frequently reside in it?....if it quacks like a duck and looks like a duck....

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The inquiry started in 2003.... 10 years to get to a judgement... appalling really

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Keep passports

Don't people keep their old passports? I do. Must be a........ retentive!

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The strap line is a bit disingenuous

too - found to be resident despite having moved to Portugal over 10 year ago. What it means is that 10 years on, they were found to have been resident in the year they left the UK, that year being a staging year in Belgium, before they even owned a property in Portugal, and whilst they were trying to enjoy the 0% Belgian CGT, along with most of the big 4 advised HNWIs of the time.

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The strap line is a bit disingenuous

too - found to be resident despite having moved to Portugal over 10 year ago. What it means is that 10 years on, they were found to have been resident in the year they left the UK, that year being a staging year in Belgium, before they even owned a property in Portugal, and whilst they were trying to enjoy the 0% Belgian CGT, along with most of the big 4 advised HNWIs of the time.

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This case makes an interesting comparison with TC03029: James Glyn. Although similar in some ways, the main difference seems to be actually settling abroad rather than, to use an expression from the Glyn case, of merely "camping abroad". In the Rumbelow case, the Portugese property was not occupied for a long time after their move admittedly partly because they wanted to avoid a Portugese tax liability.

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Double taxation

Did they pay tax in Portugal?  If they did,  surely the double taxation rules apply.  If they didn't,  fair on the HMRC for getting the tax that's owed.

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i think this is ourageous

both the judiciary and the hmrc cadre involved should be put up against a wall and shot .

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Sounds like they left half way through a year when they made a pile of cash and tried to claim change in residence - maybe half way through a deal as well?

The ten year headline got me reading though.

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"deep suspicion" of the tax authority

Having a deep suspicion of the tax authority is becoming common place, unfortunately judges just noting it is not sufficient and they should take a long harder look, interpretations are now too often based on maximising tax revenue rather HMRC applying what is fair. That is not to say in this case it wasn't fair (I don't know all the facts) but there are far too many cases of Government officials Civil Service and the big boys getting away with blue murder whilst so much energy is spent (10 years) on chasing the smaller folk. There needs to be an even handed approach if were to get back to managing our affairs in a communal spirit. If we're "all" paying "fair" taxes and our money is not being wasted then how much better this world would be. Utopia I know but we can dream!    

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read through the smoke

It seems from the above

They left the Uk

Went to belgium so they could make a huge tax free gain

Then they new they were not allowed back for 5 years so went to portugal now they had the gain to retire and portugal couldnt get it.

That seems fair planning. Not sure why its didnt work? Because HMRC said they still owned a farmhouse in the UK and came to visit it?? Even for less than 90 days??


Wonder what would have happened if


a) They sold it

b) they rented it out.


And buy the way, when was the last time your passport was stamped travelling to an EU country...doesnt happen...I even asked and they wouldnt do it.


I guess if you are going to leave you sell the lot and ship yer mates to see you abroad on your lear jet....

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I assume you mean by the way and not buy the way.
(Or are you saying that they would buy on their


What is the period of prescription for revising tax assessments in the UK? In Germany where I live it is 10 years. It sounds as though the tax authorities just got  judgement in in tme but maybe it works diferenty in  the UK.


There are not enough details to make deifnitive comment but what strikes me is that they would surely have had an official country of residence for purposes other than tax reasons. For example, which is their country of residence so far as health insurance is concerned? If is Portugal, I should have thought they had a excellent case for arguing that their tax liability is also in Portugal. However, if they failed to declare in each country on the basis that they were liable in the other, then theirs is a humdrum case of tax evasion.

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Read the case

I think some of the commentators would benefit from reading the facts of the case. See

It was accepted that they left the UK in the first place but they kept popping back to the UK and did not establish a settled life outside the UK at least to begin with. Much time outside the UK was on holidays. They frequently returned to stay in the family home which they had not sold.

Although not wholly clear, there is a strong suggestion that the main reason for the long delay was obstruction from the taxpayer.

Seems to me a classic case of clients not following the advice they were almost certainly given.

Retaining a family home was a highly dangerous course of action although the Glyn case shows that is not guaranteed to be fatal.

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left the uk or not

for tax reasons they claim to leave the country/ but expect the rest of us to accept that by leaving they meant "we still keep our home / and visit regularly..". (like i do with my home in

the country) the difference between us is that I pay taxes to support the country/ this couple

do not....yet still wish to enjoy the same benefits which I pay for...

reading the cases and from personal experience as a practising accountant/ they are simply

too many like this tax loss a couple billion.

good for the judge and hmrc in this case

lets hope  cases take 10 months not 10 years to settle.

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Left the uk or not

 They should have contacted Phil Green for some advice.

 He knows that when he comes here from Monaco he stays in a Hotel.

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For tax purposes

If you have many properties you tell HMRC where your main residence is. That's ok in the UK, but surely the same system can work for country residency, as there is no real definition. They obviously left the country (whether tax orientated or not) 4/4/01 to live permanently in another country. That really is the essence and I do believe the High Court (if they take it that far) will confirm. The fact that they could not settle in another country (wife comimg back in 2008) is irrelevant. Again coming back to see friends (what are you supposed to do when you retire or move) is irrelevant as long as you stick to the time limits.

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as someone has already

mentioned....these seems to be a good tax plan gone wrong....someone has mentioned a holiday home in portugal...and a cunning plan has been devised....except that the family home has been retained and visits to the UK have been frequent.  I suspect if someone emigrated we wouldn't see quite the same level of visits home....indeed why would you leave if you were leaving all your firends and family behind...and wanted to visit them often....i guess the £600k of tax savings was a little carrot too?!



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a little knowledge is a dangerous thing

If you read the judgement (thanks GBuckell for the link) then it reads like a Christmas Panto.   I think that this is clearly a case of the defendants getting some ad hoc information ... then ignoring the advice from a big 6 firm as it was not convenient - strange that they would pay £6,400 for it and then not be able to find a copy of the advice letter!

Just goes to show that if you take advice you should follow it or not - and not ignore most of it.

It also shows that not keeping good records and then trying to blag a judge that you lived abroad - when he has a third party witness statement that locates you in the UK as a daily bar manager at the time - is not going to go down well.

Definitely a case of a little knowledge is a dangerous thing and I think a good candidate for the Darwin awards, anyone know if there is a taxpayer category in those awards?

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Bottomline the Defendants' were found to be not credible.Any records that they had were undermined by lack of substance in relation other matters such as the wife being the licensee for the Hall.

The case is instructive in so far as making sure that taxpayers' have proper independently provable documents in relation to travel,places of residence etc.It would also be "helpful"if your lawyer sent post to you at the proper address (at least for tax purpose).

The most surprising point is that the case took so long to be adjudicated upon.The lack of evidence to support the defendants 'proposition was fatal and it should have been apparent that their chances of success were zero.

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Evidence of residency

Another ha'pence worth from me: in Germany there is a law, much decried by many English ex-pats, which requires every resident to register at the so-called "Einwohnermeldungsamt" which is an office at the town hall, where residents' names and addresses are collected. Had the defendants claimed residency in Germany, the matter would be easily settled. If they were not registered at the Einwohnermeldungamt, they could not be regarded as residents and if they were, they would have automatic documented evidence that their first place of residency was abroad.

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Pretty poor planning not to at least rent out the farmhouse..

Good result for HMRC, and just shows that a badly executed plan is worse than no plan at all.

Personally I'd like to see an end to this sort of 'planning' by bringing in some simple rules to make chargeable the gain that people seek to avoid by moving outside the UK- but any rules devised by HMRC would be 200 pages full of loopholes...and would need the active co operation of multiple jurisdictions.

Now if only we could persuade HMRC to hand over the money to the rural broadband project and get it speeded up I wouldn't be typing this on a very slow connection!

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UK resident

 This is a shambles seemingly caused by Mr and Mrs Rumbelow not taking or following proper advice in 2003 and being obstructive since.

The absolute criteria in those days to achieve the seeming objective was;

1- sell the home and, preferably, any other residential properties in UK

2- do not come back to UK AT ALL for 3 years.





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