Gaines-Cooper judical review residence case won by HMRC

Many readers of this blog may be confused by today's media stories about a tax case involving Robert Gaines-Cooper. The Times report is typical: Entrepreneur faces £30m tax demand after residency ruling leaves thousands exposed.

If you didn't know any better you might assume that the Court of Appeal had just decided against Mr Gaines-Cooper. It's certainly true that the Court of Appeal found him to have retained his residence in Britain during what he claimed to be a period of non-residence - dating back to 1976.

Here's the thing though. I wrote about the Court of Appeal's decision in this case back in October 2008! - Gaines-Cooper loses in Court of Appeal - Residence rules revisited

So how is it that his appeal seems to have been heard again by the Court of Appeal?

What the papers have omitted to note is that the most recent case was a Judicial Review. In effect a challenge to the way in which the decision had been made, rather than the rights and wrongs of the conclusion reached. Here the main focus was whether HMRC had failed to correctly apply the tests in the IR20 leaflet. The Court found in favour of HMRC. Quelle suprise!

Whatever the merits of Mr Gaines-Cooper's arguments there are few tax advisers who seriously expected the Judicial Review to succeed. Beyond this case the newer residence rules have been enshrined in what is now HMRC6: Residence, Domicile and the Remittance Basis.

The only good news is that there are moves to establish a statutory residence test that would largely remove the worries about how much discretion HMRC have in future to determine the facts long after the event.