Gaines-Cooper case - tax residence and domicile
The taxpayer loses in the Court of Appeal
The Court of Appeal has rejected the appeal by the taxpayer against the decision of the High Court in October 2007 that he is domiciled in England.
The Court of Appeal agreed with the High Court that Mr Gaines-Cooper had retained his domicile in England despite buying a property in the Seychelles in 1976 and travelling around the world subsequently looking after his various businesses. Throughout this period he owned a property in Henley-on-Thames.
We reported the High Court decision last November and that report can be read by clicking here. Members of the Tax Faculty can also read the chapter on Residence and Domicile written by Lisa Spearman and just published in TAXline Tax Planning 2008-09: this explains amongst other things the changes to the statutory provisions on residence introduced in Finance Act 2008.
The full Court of Appeal decision is not yet available. We will write a longer report on the case once that is available. We are also awaiting the decision in the Judicial Review case which Mr Gaines-Cooper has taken in relation to his residence position.
When the Gaines-Cooper case initially went before the Special Commissioners in 2006 (SpC 568) there were three issues to determine:
- whether the appellant was domiciled in England during the tax years from 1992/93 to 2003/04;
- whether he was resident in the UK during the tax years from 1993/94 to 2003/04; and
- whether he was ordinarily resident in the UK during the tax years from 1992/93 to 2003/04.
The decision on all three points was –Yes. Mr Gaines-Cooper was held to be domiciled in England and resident and ordinarily resident in the UK in all the years in question.
Domicile
The appeals to the High Court and Court of Appeal were solely on points of law in respect of the domicile decision.
Mr Gaines-Cooper case was that he had abandoned his English domicile of origin, and acquired a domicile of choice in the Seychelles in 1976. The Special Commissioners did not agree that he had abandoned his English domicile, and listed out all the facts which they considered indicated his continuing connection with the England.
On appeal to the High Court, Michael Flesch QC, for Mr Gaines-Cooper, argued that:
"… on the facts found and the unchallenged evidence, the only true and reasonable conclusion is that Mr Gaines-Cooper acquired a domicile of choice in the Seychelles in 1976 or thereabouts. Since the Special Commissioners reached a contrary conclusion, it must be inferred that they made an error of law."
Both Justice Lewison in the High Court and now Lord Justice Rimer and his colleagues in the Court of Appeal have disagreed and upheld the decision of the Special Commissioners.
2 November 2008
