Gaines-Cooper Loss May Open the Floodgates
Thousands of tax exiles could face huge bills from the taxman after a British tycoon lost a landmark court ruling yesterday.
In a vital test case, the Appeal Court rejected claims by international businessman, Robert Gaines-Cooper, that the Revenue laid a 'devious trap' for him by refusing him non-resident status and hitting him with a £30million retrospective penalty.
In a decision which will be pawed-over anxiously by the wealthy and their advisers, three judges expressed 'some sympathy' for Mr Gaines-Cooper - but ruled that he had never qualified for exemption from UK taxes as a non-resident.
The globe-trotting businessman insists he has been domiciled at his luxury villa in the Seychelles for more than 30 years and has religiously kept to the taxman's published demands by spending no more than 91 days per year in the UK.
But the judges - ruling on the correct interpretation of the Revenue's non-resident policy, known as 'IR20' - said that England had remained 'the centre of gravity of his life and interests'.
Gaines-Cooper had never cut his ties with Berkshire, where he grew up, and Oxfordshire, where the court ruled his mansion, near Henley, continues to be his 'chief residence'.
Laying down guidelines for the future, Lord Justice Moses said Mr Gaines-Cooper had failed to show 'a distinct break' from his social and family ties in the UK and his complaints of unfair treatment were based on an 'impossible construction' of the law.
And, crucially, the judge, sitting with Lord Justice Dyson and Lord Justice Ward, said that the 91-day rule could not establish non-residence status, but was 'important only to establish whether non-resident status, once acquired, has been lost'.