A Peck, S Peck (TC6179)
Whether taxpayers had made a distinct break in their UK residence
The taxpayers were British and lived in the UK until 2006 when they decided to move to Monaco. They bought a house there but kept their UK property for use as a holiday home when they visited. They gave up their NHS medical cards, removed themselves from their GP practice, surrendered their UK driving licences and sold their investments. They registered with a doctor, dentist and cardiologist in Monaco. They also have Monaco bank accounts and credit cards, but kept their UK ones. They ensured their visits to the UK were under 90 days each tax year.
They continued to be taxable in the UK because they had various sources of UK income and they remained as directors of their group of companies. HMRC issued assessments for the years 2006-07 to 2008-09 and 2010-11 to 2011-12 on the basis the taxpayers were UK-resident for those years. The taxpayers appealed, saying they lived in Monaco.
The First-tier Tribunal said the taxpayers did not make a distinct break from the UK. The judge said it was ‘not possible to say that simply because before April 2006 Mr and Mrs Peck rarely left the UK and after April 2006 they spent three-quarters of the year in Monaco’ that was a distinct break in the pattern of their life in the UK. It was necessary to look at the nature of their life in the UK both before and after 2006. The tribunal agreed with HMRC that the couple had a ‘settled abode’ in the UK and that a week spent in the UK in 2005 was similar to a typical week in the UK in 2007. The judge said: ‘Although a person can have only one domicile at a time, he may simultaneously reside in more than one place.’
The tribunal concluded the taxpayers’ presence in the UK was ‘of sufficient time and had sufficient degree of permanence and continuity so as to constitute residence’.
The tribunal noted that, had the statutory residence test existed for the years in question, the taxpayers would not have been considered UK resident in the years. This, however, had no bearing on the appeal. The taxpayers’ appeal was dismissed.