In an important case, Robert Gaines-Cooper has been given permission to appeal his judicial review claim to the Supreme Court.
In February 2010, the Court of Appeal dismissed Mr Gaines-Cooper's application for judicial review of HM Revenue & Customs' (HMRC) refusal to treat him as non-resident in the UK for tax purposes. Mr Gaines-Cooper, who has lived in the Seychelles since 1976, claimed that HMRC failed to interpret its IR20 guidance correctly.
IR20 sets out HMRC's understanding of the law on residence, ordinary residence and domicile; it states that if an individual leaves the UK permanently or for at least three years, he/she will be treated as non-resident providing that he/she does not visit the UK for more than 183 days in any tax year or for an average of more than 90 days. Although Mr Gaines-Cooper satisfied these requirements, HMRC argued that an individual could not expect to rely on IR20 as it was merely guidance, and that an individual's status depended on his/her particular circumstances. The Court of Appeal agreed with HMRC that IR20 implied that Mr Gaines-Cooper had to demonstrate a 'distinct break' from his former social and family ties within the UK in order to claim that he had permanently or indefinitely left the UK. It ruled that he had failed to do this when he left the UK.
This decision highlights the need for an all-encompassing statutory definition of 'residence' and 'non-residence', but for now, individuals who choose to rely on IR20 (and its successor, HMRC6) must ensure that they fall within its terms. However, the forthcoming judicial review (for which no date has been given yet) means that the Court of Appeal ruling may now not be the end of the story...
NB: I should point out that a judicial review claim allows an individual to challenge the way in which a public authority, such as a government department (in this case, HMRC), has reached a decision. It is a separate process from appealing against the decision itself.
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