Vision for an independent organisation to represent UK landlords20:18 PM, 16th September 2018
About 6 days ago 59
Thousands of property tax exiles could face huge bills if a billionaire businessman loses his long-running tax battle with HM Revenue and Customs (HMRC) at the Supreme Court.
Robert Gaines-Cooper has fought for years against claims for tax dating back to 1982 and lost his case on appeal earlier this year.
The court ruled that despite flawed HMRC guidance to UK nationals setting up a permanent home overseas, Mr Gaines-Cooper had not effectively broken his links with the UK and still remained resident for tax purposes.
They pointed out his family home in Henley-on-Thames, a UK-based collection of classic Rolls-Royces and trips to Ascot showed “ample” grounds for HMRC to argue that he was “resident and ordinarily resident in the UK”.
The law has got to be made clear,” said Mr Gaines-Cooper. “This case is not just for myself. It’s about fighting for clarity in the UK tax system.
“The lack of transparency in the UK tax system means that no taxpayer can rely on guidance from the UK tax authorities.
“Moreover, HMRC’s aggressive approach assumes guilt and leaves taxpayers with the inference that they have deliberately avoided tax. In my case, that is simply wrong.”
Mr Gaines-Cooper says that since leaving the UK in 1976, he has strictly followed HMRC guidance that gives non-resident status and tax benefits to anyone who spends no more than 90 days a year in the country.
The case is important for property investors who were UK resident taxpayers but now live overseas.
Many follow a tax strategy of selling buy to let or other property investments once they have left the UK and settled abroad. Capital gains tax (CGT) rules do not apply to UK non-residents who have sold property they own here while they are resident for tax in another country.
However, if HMRC can argue that a taxpayer is resident for tax, they can chase unpaid CGT on property disposals back 20 years or more.
Tax advisors stress that anyone in this position should review his or her residence status for tax purposes.
If you would like further advice on tax or accountancy please call The Money Centre’s Customer Care Team on 01603 894525 and they will be delighted to refer you to our Joint Venture Tax Partners who specialise in property taxation. The initial introduction is a no cost no obligation service.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More