Journal :: UK Residence for Income Tax purposes

Published: November 18, 2005
Author: Graham Dragon
Category: Tax
Permalink: UK Residence for Income Tax purposes

Most of you will by now have heard the name Dr Brice, Special Commissioner. She of the infamous Arctic Systems decision.

No, this is not yet another report on Arctic Systems, important and far reaching though that case is. It is about another case decided by Dr Brice which also has important implications for income tax planning.

It concerns a British Airways pilot by the name of Ian Shepherd. Mr Shepherd thought to rely on the indication in the Revenue publication IR 20 that he would not be regarded as resident for Income Tax purposes as long as he did not stay in the UK for more than 183 days.

Whilst there was some dispute about exactly how many days Mr Shepherd had been in the UK in one of the years, it was clear he had met the requirements if the 183 days rule were interpreted rigidly. Over the period in question, it was also not disputed that his average stay in the UK was less than 91 days a year.

Nevertheless, Dr Brice found in favour of HMRC and decided that Mr Shepherd was tax resident in the UK.

There does appear to be a little science fiction in this particular case. At one point the precedent of an Indian civil servant, Mr Brown, was considered. Here is what is said about Brown at paragraph 51 of the report:

?Brown also concerned an Indian civil servant who retired in 1983 and came to the United Kingdom where he took a house and lived until February 1918. He then gave up his house and lived in hotels in the United Kingdom until October 1919. He then spent nine months of each year in hotels in Europe and three months in the United Kingdom visiting his friends. The issue was whether he was resident in the United Kingdom for the year 1924-25 and the Special Commissioners held that he was not. Their decision was upheld by Rowlatt J.?

Levity aside, this is an important case for any advisers who have clients intending to establish non-UK residence for Income Tax purposes. Perhaps the Revenue will now be looking very closely at those numerous individuals who claim to reside in the Channel Islands, but spend every weekend in England, maintaining significant social ties here.

Found this article helpful?

Why not sign up for our Journal to have articles like these emailed to you regularly so you can stay ahead of the game. Alternatively, continue reading our Journal Archive.

About Graham Dragon

Note: We do not accept liability for the content of our e-mail Journal or for the consequences of any actions taken or not taken by yourself or any third party on the basis of the information provided. We are unable to advise you on tax matters. If you wish to obtain further information or help on this or on any other tax matters you should consult with a tax accountant or other suitably qualified and experienced tax professional.

Share This Article

About the Adviser Breakthrough Journal

Adviser Breakthrough Solutions provides the IFA community with a FREE and easy way to keep ahead of the game. Subscription to this journal is FREE. To sign up simply enter your name and email address below.

View Journal Archive

Journal Categories

Back Office (10)

The Back Office Tip of the Month is your opportunity to find out what is working well for other advisers, and save having to reinvent the wheel yourself. It will cover the broad spectrum of the ways in which successful practices organise themselves, as well as some of the industry specific processes which help make our jobs easier.

Client Care (7)

We all want to ensure we continue to give the very best service to our clients.

In the Client Care Tip of the Month we will share ideas other advisers have found help them to maintain excellence in the ways they look after their clients.

Marketing (16)

Any business that wants to survive has to get its marketing right. In the midst of an economic boom, plenty of businesses go bust; and in the midst of a recession, plenty of businesses grow from strength to strength. The difference between the two types of business is almost invariably linked to their marketing.

In the Marketing Tip of the Month we will share with you some marketing ideas successful advisers are using right now to ensure their practices not only survive, but thrive.

Money Making (6)

As a financial adviser you are not here to practise an interesting hobby. Your practice is a business. A business which should provide you with the income you want.

The Money Making Tip of the Month recognises this, and will provide you with ideas which you can adapt to ensure you really get the income you want out of your practice.

Motivational (3)

It is a fact of life that the more motivated we are, the more we can achieve. But it also seems to be a fact in our industry that wherever we turn we see news and gossip that demotivates rather than motivates us.

The Motivational Tip of the Month is intended to reverse that negative trend. It will be a reminder of just why we joined our profession in the first place and is designed to inspire you to achieve the great things of which you really are capable.

Tax (76)

Most clients recognise the value of proper tax planning. They may rarely act on the tax advice you give them, but they appreciate the fact that you gave it to them anyway. It probably puts you head and shoulders above any other financial advisers they may have met, and reinforces the fact that you are a professional who is there to help them.

Each month we will give you a tax tip you may wish to slip into your conversations with your clients, or even include in your newsletter to them.

Time Management (3)

Whoever your hero in life may be, whether it is Bill Gates, Warren Buffett, Leonardo Da Vinci, or Mother Teresa, that person had exactly the same number of hours in their day as you when they achieved greatness. The big difference is how they used those hours.

The Time Management Tip of the Month will share ideas you can put into practice to squeeze more value out of your day.