Gaines-Cooper returns to tribunal over disputed £30m tax bill

Multimillionaire Robert Gaines-Cooper is back in the tax courts at the First Tier Tribunal disputing a long-running avoidance case centring on tax liability and domicile issues

In the latest phase of the taxpayer’s decades-long battle with HMRC, which has seen Gaines-Cooper fight the case through all levels of the UK court system, this time he is arguing that his Seychelles residency meant that he was not liable for UK tax as he only spent the statutory 91 days in the country, and therefore was not eligible to pay UK tax.

Jonathan Crow QC is representing Gaines-Cooper, who is not expected to attend the FTT inperson for health reasons but will give video evidence from Jersey. The tribunal is likely to sit for up to six weeks with a decision unlikely before the new year.

The case originated in the 1990s over a disputed £30m tax bill where the tax authorities argued that Gaines-Cooper had evaded taxes for a 10-year period from 1992-93 through to 2003-04 tax years, and an intertwined, but separate, dispute over domiciled status over whether he had been permanently living in the Seychelles since the 1970s, which he claimed, but was disputed by HMRC as the tax authority always argued that he had substantial ties in the UK.

He was last at the Supreme Court in 2011 ([2011] BTC 610) where he appealed a Court of Appeal decision issued in 2010. On this occasion five Supreme Court judges dismissed a claim (submitted with a two other appellants) for a judicial review of decisions by HMRC that they were not entitled to non-resident status. These were appeals against a decision by the Court of Appeal ([2010] EWCA Civ 83; [2010] BTC 198).

At the Supreme Court, lawyers for Gaines-Cooper and his fellow appellants contended that HMRC had failed to interpret correctly Revenue and Custom’s IR20 (1999 edition) notice, which provided guidance in relation to the residence and ordinary residence of individuals, and had unlawfully refused to apply it. IR20 remained in force until 2009.

He argued that in 1976, when he was aged 39, he acquired a domicile of choice in the Seychelles, but this argument was rejected as HMRC said it knew that he remained domiciled in England until 2003-04 despite living a jetset lifestyle with extensive travel.

The Supreme Court heard how he had two substantial homes ‘maintained and to a significant extent occupied by him in Berkshire and in Oxfordshire throughout those years' and to the presence in England, following 1977, of the wife whom he was ultimately to marry in 1993 and also, from his birth in 1998 until after 2004, of their son, HMRC inspectors said that from 1992 to 2004 Gaines-Cooper ‘dwelt permanently’ in the latter home in England and that, notwithstanding his residence in the Seychelles throughout those years, he was ordinarily resident in the UK during the years under review.

At a previous appearance over the matter in 2008 at the Court of Appeal, the judge dismissed Gaines-Cooper's claim as ‘nothing more than an illegitimate attempt to reargue the facts’.

At the time of the 2008 case, Gaines-Cooper had a number of businesses worldwide and a home in the Seychelles as well as a house in Henley in Berkshire and a property in Oxfordshire where he kept various assets, including a collection of Rolls-Royces.

In 2008, Revenue & Customs (now HMRC) claimed he had never left the country properly and was not entitled to non-domicile status, despite his claims that he observed the 91-day rule. He had been appealing from 1993 through to 2004, claiming he had not been a resident in England since the 1970s. This case was thrown out by the Court of Appeal.


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