Tax exiles not exiled enough

| 17/02/2010

(Daily Telegraph): The Appeal Court rejected the case of Robert Gaines-Cooper, a millionaire who has claimed non-resident status based on his ownership of an estate in the Seychelles. Non-residents are often British-born individuals who persuade the authorities they have largely left the country and are therefore able legally to avoid many British taxes. Accountants and tax experts have long assumed that as long as someone spent no more than 91 days a year in Britain, they could claim non-resident status and tax benefits. But the Appeal Court judges ruled that because Gaines-Cooper retained significant personal ties to Britain, HM Customs and Revenue was justified in denying him non-resident tax benefits.

Accountants said the Court of Appeal’s ruling could have implications for all British tax exiles. Some non-residents claim that status by frequently flying into Britain from a base in Monaco, while their families remain here permanently. Mike Warburton, a senior tax partner at Grant Thornton, an accountancy firm, said the court ruling had “moved the goalposts” for rich tax exiles. He said: “Thousands of people who thought they were fulfilling the rules on tax exiles may now find that they have not succeeded in their plans because they have kept connections with the UK. The goalposts have been moved. Everyone thought they knew where they stood.”

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