Clampdown on non-residence tax perks

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People who are not paying UK tax because they spend less than 90 days in the country could face a hefty tax bill following a recent ruling by the Special Commissioners, says KPMG. In the case Shepherd v HMRC, the Commissioners ruled that Mr Shepherd, an airline pilot, was still resident in the UK for tax purposes in 1999/2000, despite spending only 80 days in the UK during that year.

Mr Shepherd had claimed that he became resident in Cyprus in October 1998, spending 77 days there in a rented flat during 1999/2000, plus 180 days outside the UK on flights. However, the Commissioners argued that his attachments abroad were 'somewhat temporary', while his residence in the UK 'was part of the regular and habitual pattern of his mode of life'. Also, his 'his settled or usual abode' was in the UK,...

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23rd Jul 2005 10:48

Resident in Cyprus
He claimed he was resident in Cyprus on the basis of spending 77 days there?

Whilst it has been suggested that one can be a PNR (permanent non-resident by never settling anywhere) I wouldn't mind betting that he is not regarded as being resident in Cyprus either - do their rules require 183 days? Note the quote:

"Although he was a resident of the Republic of Cyprus since 1998 the Cyprus tax authorities did not accept his tax assessments for the period from October 1998 to 31 December 1999 because, according to Cyprus legislation, the emoluments of an alien individual from the rendering of salaried services outside the Republic were exempt from tax if they were not payable in Cyprus. On 7 February 2002 the Revenue asked why the Cyprus tax authorities had not accepted the tax assessments for the period from October 1998 to 31 December 1999 and the reply was because the Appellant had lived in Cyprus for only 68 days during that period."

And how about this gem? - "All correspondence addressed to the Appellant, including his flight rosters from British Airways, his correspondence from the Revenue, and his bank and credit card statements, continued to be sent to him there. The Appellant did not inform his United Kingdom bank that he had moved to Cyprus."

Methinks the firm, and the taxpayer, doth protest too much! The next stage indeed - I can't see that the taxpayer had much of a case to begin with here - and the special commissioner has been exceeding kind in reviewing all of the case law as thoroughly as he has.

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27th Jul 2005 12:33

further for the ir's notes
somewhere in h.m.'s guidence notes there is at yet no reference to those who spend their time on the space station.

seeing their try to be one step ahead, perhaps time to deal with this.

ps cgt on lunar plot sales?

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