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Wednesday 28 April 2010

Dains are highlighting that wealthy British citizens, who believed they could avoid UK taxes by spending fewer than 91 days in the UK, may find they have to pay up after all, following a ruling from the Court of Appeal.

The three judges upheld the right of HM Revenue and Customs (HMRC) to tax businessman Robert Gains-Cooper, even though he had lived in the Seychelles since 1976 and had since ensured he did not spend more than 90 days a year in the UK.

However, HMRC argued that he had not cut his ties with his home country, since he still owned a mansion in Oxfordshire and maintained close ties with friends and family.

The 91-day rule does not, in itself, establish non-residency, according to HMRC, and was more important in establishing whether non-residency, once established, had been lost.

The judges agreed, and said it had always been the case that any would-be tax exile had to show they had really left the country.

Mr Gains-Cooper plans to appeal to the Supreme Court, but if he is again unsuccessful, it would potentially leave around six million UK citizens living abroad open to retrospective tax bills dating back up to six years.

For more information on the rules surrounding non-residency, please contact Andy McQuillan on tel: 0845 555 8844 or email tax@dains.com

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