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I dislike the comments from Ingrid Simler QC
I have not had much sympathy with Mr. Gaines-Cooper in the past as I think that most of the 'real' problems of this case he has brought upon himself - specifically his continual visits to the UK for social reasons, his wife and child coming to the UK for the child’s education, etc.
However, I also find myself at odds with HMRC's viewpoint. I realise that the UK is having difficulty paying its way right now and as such the 50% tax band has been instituted to attempt to cover the deficit (although I've always considered this to be a divisive measure left by the previous government).
This has led to a lot of people wishing to leave the UK for different places, primarily Switzerland, where the cost of living is similar to the UK, but the rate of taxation is somewhat lower. Obviously the purpose of creating a new high rate tax band is not to reduce the overall tax take, but that seems to have been the result.
The comment from Ms. Simler that "residence has an “adhesive” nature and “something more” is required to establish non-residence." is particularly offensive and smacks of HMRC grasping at straws to maintain a legal fiction purely to justify continued income from a departed taxpayer.
To my mind, once a taxpayer leaves the UK and establishes themselves and their family in another jurisdiction, provided they visit the UK no more than any other tourist or non-resident foreigner (and 90-days per year seems a bit too generous), then they should be treated as non-resident from the day of their departure until such time as they die or they resume residence.
This is one of the reasons why I am keen to see a clear statutory residence test, even if it is on the whole more restrictive than the current tests outlined and applied by HMRC. At least with a statutory test we wouldn't get the continuous attempts at reinterpretation, years after the events which we get with HMRC today.
tax residence
Its hard enough for us involved in tax to interpret some of HMRC musings. What chance does the man in the street have. Surely as part of the role of the office of tax simplification they should be working on this. Keep it easy make it a 90 day rule or a 75 day one. But make it easy so we can all follow it and not have something wishy washy.
Residence or Domicile
I’m another who has had little sympathy for Mr Gaines-Cooper who in some ways has been trying to have it both ways. In my view he has certainly retained UK domicile status and if that were all that HMRC were arguing it would be fair enough. Trying to say he has retained his residence is another matter. It certainly is something that is concerning people like myself who are non-resident but whose business interests are linked with the UK.
Having been born in Scotland of a Scottish father and having lived in the UK for over 50 years I now live and work on the Isle of Man. HMRC seem to accept I am not UK resident – though they still send me a SA return each year – and though I have never formally claimed to have changed domicile I have little doubt I could as I have no property or close family ties in the UK and no desire to return there to live. However I do have business relationships with the UK in that I am a director of companies which have UK subsidiaries and I occasionally travel to the UK to meet with clients. The consultation on the statutory definition could in fact end up with me being able to claim non domicile status but if I'm not careful also classify me as UK resident.
Surely some mistake?