Another Residence Case - This Time The Revenue Lose
There have been a number of tax cases recently regarding the question of residence in the UK for tax purposes. In both the Gaines-Cooper and Barrett cases HM Revenue & Customs established that the taxpayers remained resident in the UK. In a recent case heard before the Special Commissioners concerning a British Airways pilot the Revenue were unsuccessful. Full details of the case can be found here.
Briefly the case involved a pilot who was born South Africa and moved to Kenya as a minor where he acquired British citizenship. He returned to South Africa while still a minor and, after completing his education there, trained as a pilot. He married a UK citizen (in South Africa) but separated after a few years when his wife and children returned to the UK.
He eventually took up employment with BA being based at Gatwick/Heathrow, flying long haul to South Africa, and bought a house near Gatwick. In 1997, when his marriage was dissolved, he decided to live in South Africa and “commute” to the UK for his work.
After 1997 the only time he spent in the UK was a few days before and after each flight staying at his house near Gatwick which he had retained. In the meantime he established a home in South Africa, buying a home near his parents, joining various flying clubs and establishing a social life there. However, using a day count he spent more than 90 days a year in the UK (although less than 183 days).
The Revenue maintained that he had not made a distinct break from the UK and therefore continued to be resident and ordinarily resident in the UK. The Special Commissioner, Dr Nuala Brice rejected both these contentions. It is not known whether the Revenue will appeal.
