The lengthy case of British expatriate Robert Gaines-Cooper has come to a head, with The Supreme Court ruling in favour of HMRC.
The battle between Gaines-Cooper and HMRC has long attracted attention- it centres on the retired expat’s millions and whether he should have to pay UK tax or not.
Having spent over 30 years living and conducting business away from the UK, in the Seychelles, Gaines-Cooper was certain that he had done enough to be classed as a non-resident, especially as he followed the guidelines laid out in the official HMRC IR20 booklet.
However, despite following what he thought were the rules, HMRC claimed that these ‘rules’ are simply guidelines, and that on the merits of his individual case Gaines-Cooper had enough ties to the UK to warrant tax liability. The ties in question are his regular trips to the UK, and also a large home he owns in Henley-on-Thames.
Subsequently, Gaines-Cooper must now pay a huge backdated tax bill, and his solicitor warns that other expatriates are at “high risk” if they believe following HMRCs official guidelines is enough to escape tax liability.
In fact, the subject of ‘following guidelines’ has in some ways taken precedence over the tax itself, as Gaines-Cooper is said to have been seeking a moral victory, as his lawyer, Peter Vains, explained: “He will pay what he is due. It was never about tax but about what was right and wrong. He satisfied all of the guideline terms but the revenue and courts have decided that some additional terms need to be implied in the reading. The Supreme Court is the ultimate authority, so one can't complain, but it is harsh.”