Thread: O/T:UK Tax ruling could hit wealthy expatriates

Unlikely to affect anyone on this board (esp. neither of those NickA or CMn blokes) , but you never know

Tax ruling could hit wealthy expatriates
Fri Nov 17, 2006 9:53 AM GMT



By Jennifer Hill
LONDON (Reuters) - Wealthy Britons who live overseas but often return to the UK could be hammered with huge tax bills following a landmark court ruling, tax experts say.
People who spend fewer than an average 90 days in the UK during four consecutive tax years and 183 days or less during any single tax year are normally considered non-resident.
The calculation has typically been done on the basis that days of arrival and departure are excluded.
Those who exceed either limit are liable for UK income tax.
But the Special Commissioners have ruled that multi-millionaire Robert Gaines-Cooper, who made numerous overnight stops in Britain, should have included those days.
The tax judges ruled that the entrepreneur, who they heard had helped set up more than 100 companies over the world, was domiciled in England in the tax years between 1992 and 2004 -- although he claimed he was resident and domiciled in the Seychelles.
The 69-year-old, who was born in Reading, Berkshire, and obtained a residency permit for the Seychelles in 1976, now faces more than a decade of back-dated UK tax payments.
Gaines-Cooper, whose parents both worked for the Inland Revenue, started his first business, a juke-box company, in 1958.
His other business interests have included a Canadian property firm, a plastics factory in the Seychelles and an Italian business which manufactured and distributed medical products.
The inquiry heard that he travelled extensively and would typically spend 150 days per year in aeroplanes, but ruled it was "significant" that all his connections with the UK were in a small area of Berkshire and Oxfordshire.
It was here that Gaines-Cooper, who owned a range of "vintage cars, paintings and valuable guns", was born, went to school, was married twice, bought two houses, invested in at least two farms, had company offices, attended Royal Ascot and went to shooting events, the report said.
The fact that he had enrolled his now eight-year-old son at Eton when he was born in 1998 and shortly later paid all the fees for his attendance from the ages of 13 to 18 "showed his intentions for the future", the Revenue argued.
Tim Gregory, a partner in the private wealth division of chartered accountant Saffery Champness, said the ruling highlighted the "risk of seeking to push the taxman too far" -- and could prove costly for other wealthy Britons.
"This is a lesson in what taxpayers can rely on," he said.
"The practice of not counting days of arrival or departure is only the 'normal rule' applied by HM Revenue & Customs (HMRC), and tax legislation makes no mention of it.
"Anyone relying on non-statutory guidance from HMRC is taking a risk.
"If your time in the UK equals exactly 90 days excluding days of arrival and departure, it would arguably appear on the face of it that you are deliberately pushing the limits -- and could well expect some questions from the taxman."

No big deal for most and most likely those who are nearly affected will spend less time out of the county allowing the rest of the chav like gene pool to breed like proverbial rabbits amongst themselves.
This guy messed up paying school fees in advance, that is telling...the tax folks love that kind of thing as evidence when they want to win an argument.