HMRC seems determined to screw expats

[woolybanana]

The implications of this ruling are disturbing as the rules are now not at all clear, and can apparently be made up as the HMRC goes along. All part of Labour wealth destruction http://business.timesonline.co.uk/tol/business/law/article7029806.ece

[nounours]

I think the ruling is what Will has been saying for it seems ever, just nobody wants to listen as they cross off their 183 days on their calendars[blink]. 

[Russethouse]

As he and both his parents had been tax inspectors its slightly a case of the biter bit, isn't it ?[:-))]

[woolybanana]

This however seems to widen the criteria applied as it includes kids shcools which have never been part of the deal as boarding is traditionally used by expats.

As I said, it is part of the predatory HMRC who function is to take as much as possible from as many as possible, and a bit more if they can.

[Russethouse]

 I doubt very much if school on its own, especially boarding school, would  be a problem, but this guy maintained other interests, he kept a home going here, apparently kept up membership of Clubs, made his Will here (which strikes me as being sensible, but what do I know) etc.

 

 

[cooperlola]

My, how my heart bleeds.

What is it with this idea that any government (not just the UK one) "takes" money from people?  Governments tax in order to re-distribute wealth and provide care and welfare for those less able to cope and provide for themselves.  You may not aprove of this - that is your right - but the idea that politicians take money from people is a little ridiculous.  Yes, there are corrupt politicians in the UK and they may line their own pockets in various ways, and that should be stopped, I agree.  However, part of their function is to care for everybody in the country which they govern, and to do this they do need to take more money from the rich than from the poor - thus welfare states work.  Without this we must rely upon charity and the generosity of indiviudals which - as history tells you from the days of workhouses and the like - cannot be guaranteed.

[Bugsy]

Well, as an ordinary bloke, who has spent his life honestly (excluding the odd bit of speeding in my youth [:)]), always worked to pay my way and paid all my taxes, I have no sympathy with these people whatsoever.

Screw em for every penny.

.

[woolybanana]

It is just 'these people' who go out and create new jobs and opportunities for others who we should be encouraging with lower taxes.

High taxes and predatory taxing does not create wealth, nor do government servants in any guise.

There is little evidence that so called wealth distribution works either, as it just creates more clients for handouts who are essentially wasted.

[KathyF]

Why do they need lower taxes, Wooly?  If he earns a million a year and pay tax at 50% (the highest rate) he's still left with just over half a million a year to live on.  Poor guy! [;-)] I'm a pensioner and still pay some tax on my very modest pension, though only at 20%. Lucky me! [:)] I'll swop with him any day. [:D]

[Russethouse]

 I don't see any mention of this guy having ongoing business interests in the UK. It does say he began a business in 1958, and founded another surgical equipment business, but it doesn't mention if these enterprises are ongoing.

Easy to see how this guy fell in love with the Seychelles http://www.lowtax.net/lowtax/html/jsydctx.html [:)]

[woolybanana]

[quote user="cooperlola"]

My, how my heart bleeds.

What is it with this idea that any government (not just the UK one) "takes" money from people?  Governments tax in order to re-distribute wealth and provide care and welfare for those less able to cope and provide for themselves.  You may not aprove of this - that is your right - but the idea that politicians take money from people is a little ridiculous.  Yes, there are corrupt politicians in the UK and they may line their own pockets in various ways, and that should be stopped, I agree.  However, part of their function is to care for everybody in the country which they govern, and to do this they do need to take more money from the rich than from the poor - thus welfare states work.  Without this we must rely upon charity and the generosity of indiviudals which - as history tells you from the days of workhouses and the like - cannot be guaranteed.

[/quote] Taxation is not a right of government, it is a privilege granted by the people on condition that the money is used appropriately and that taxation is reasonable. Predatory taxation begins to eat into that as does the waste of public resources in many situations in many countries. Centre of interest which includes such things as club membership and the location of car collections is far too wide a net.

[Benjamin]

[quote user="woolybanana"]

High taxes and predatory taxing does not create wealth, [/quote]

Very true, but you still hear the cry of tax 'em until they squeal.

My neice (lovely girl) works for a hedge fund and we were discussing proposals to increase taxes on these type of outfits. As she pointed out a hedge fund manager is a laptop and a mobile 'phone with internet connection. It's very easy to up sticks and move countries (with a little more tax planning than this gentleman).

[Russethouse]

 But taken all together they build a picture -

[woolybanana]

But the money he has left over is free to be invested or for other purposes which create or maintain jobs.

[NickP]

[quote user="Bugbear"]Well, as an ordinary bloke, who has spent his life honestly (excluding the odd bit of speeding in my youth [:)]), always worked to pay my way and paid all my taxes, I have no sympathy with these people whatsoever.

Screw em for every penny.

.
[/quote]

 

I'm with you Bb. [B]        When I started work and was complaining about paying tax an old guy I was working with said "think yourself lucky son that you earn enough to pay tax!"

[Quillan]

[quote user="woolybanana"]It is just 'these people' who go out and create new jobs and opportunities for others who we should be encouraging with lower taxes. High taxes and predatory taxing does not create wealth, nor do government servants in any guise. There is little evidence that so called wealth distribution works either, as it just creates more clients for handouts who are essentially wasted.[/quote]

Spot on Wooly. If you read the article carefully you may discover that this chap started off with a 'one arm bandit' company in Reading and expanded from there all over the world in different industries. He is still the owner of several business's and still helps young entrepreneurs get started. He is also chairman of the National Council for Children and lots of other charities. It not as if he is one of those that just takes and takes then gives nothing back.

Judging by some of the stories I have heard lately it seems the UK government has instructed to HMRC to try and get as much money in from wherever they can to help pay of the current government debts.

If you want to know more about this particular chap and what he has done then you can read about him here http://www.robertgainescooper.com/index.html

[Quillan]

Wooly I seem to remember from following the documentry series about the Royal Navy that income tax as we now know it today was something to raise money to build ships because the king was broke. I think the Bank of England was also created for the same reason initially. Apparently if was like a one off tax on everyone who worked for a set period of time but once they twigged it was a nice little earner they never stopped it.

[Russethouse]

That article isn't just the tiniest bit biased is it Q ?[:)]

 

[Bugsy]

[quote user="Quillan"]Wooly I seem to remember from following the documentry series about the Royal Navy that income tax as we now know it today was something to raise money to build ships because the king was broke. I think the Bank of England was also created for the same reason initially. Apparently if was like a one off tax on everyone who worked for a set period of time but once they twigged it was a nice little earner they never stopped it.[/quote]

It was that bloke Young Bill Pitt we have to thank. [:D]

.

[AnOther]

Let's call a spade a spade, this gentleman, and many others like him, take up token foreign residencies to avoid paying tax, nothing more nothing less.

Rules change all the time and in this instance the change has worked against him, tough.

[Will]

I rather think you are perfectly correct there, AnO.

Meanwhile, if anybody wants an example of a personal taxation regime that squeezes the hard-working, low-earning ordinary folk while senior politicians get paid by the state for the sort of shenanigans that makes the House of Commons look like a bunch of amateurs, look no further than France.

[Araucaria]

If anyone is interested in reading the original decision by the Special Commissioners in the Gaines-Cooper case, it's here.

The Special Commissioners (who are an independent judicial tribunal, not part of HMRC) cannot take into account HMRC/IR publications or explanations about what makes you resident in the UK. They can only look at the law or at previous court decisions. But they did decide how many days Gaines-Cooper spent in the UK, and it was a lot more than 91 in virtually every year they looked at. It's in paragraphs 98 to 109. The later court decisions were Gaines-Cooper's (failed) attempts to overturn the rulings made by the Special Commssioners.

[Gluestick]

[quote user="Araucaria"]If anyone is interested in reading the original decision by the Special Commissioners in the Gaines-Cooper case, it's here.

The Special Commissioners (who are an independent judicial tribunal, not part of HMRC) cannot take into account HMRC/IR publications or explanations about what makes you resident in the UK. They can only look at the law or at previous court decisions. But they did decide how many days Gaines-Cooper spent in the UK, and it was a lot more than 91 in virtually every year they looked at. It's in paragraphs 98 to 109. The later court decisions were Gaines-Cooper's (failed) attempts to overturn the rulings made by the Special Commssioners.

[/quote]

Some sanity!

The order of this affair was HMRC had been investigating Mr Gaines-Cooper for some little while: the Revenue served him with an Assessment: he appealed and his appeal was subsequently heard by the Special Commissioners: as is normal. the Appellant then sought leave to appeal which was granted, however: 

"Lord Justice Rimer sitting with Lord Justice Wilson in the Court of Appeal in London, dismissed a proposed appeal as “nothing more than an illegitimate attempt to reargue the facts”.

The Appellant was granted a Judicial Review: which found against him.  http://www.ukmediacentre.pwc.com/News-Releases/Gaines-Cooper-residency-case-PwC-welcomes-judgment-on-tax-treatment-of-employees-who-work-or-are-seconded-abroad-e01.aspx

However, what was found, was IR20 binds the Revenue to its defined acceptance of UK Residency Guidance: thus despite the knee jerk reactions to the Revenue moving the goalposts as they go along, clearly they cannot.

The Revenue gave clear notice some while back that they intended to place offshore tax evasion and avoidance under the investigatory microscope: and even mounted a moratorium window to allow those who fully realised they were on a dangerous wicket to seek accommodation free of penalties.

This is not a sudden bolt out of the blue: rather, the case has been going on for some little time and tax professionals have been carefully monitoring the end result as it thereafter, is assumed into the body of case law and sets significant precedent for all similar future cases.

It is quite obvious when studying the case and the Special Commissioner's lengthy findings and conclusions, Gaines-Cooper failed to take the proper steps to disassociate and disconnect himself with his original fiscal domicile, Britain, and believed his wealth made him above the rules and regulations: thus demonstrating either incredible stupidity (Doubtful, as he is a member of MENSA!) lack of organisational competence (His business track record demonstrates the reverse), or, more obviously, a cavalier and arrogant contempt for rules and regulations.

What he wanted it seems, was to have his cake and eat it too. Nice work if you can get it!

As with such as Richard Branson and many others (And before that window closed), he could have set up an offshore trust and allowed this to hold his wealth.

Retaining numerous connections with Britain demonstrated lack of real volition.

If a person really wants to convince HMRC they have changed their domicile, then they must take robust steps to prove such change: these include arranging for local interment, engrossing one's will in the new tax jurisdiction; adopting nationality of one's new state: and most critically of all, not personally owning beneficial assets in one's mother country; particularly real estate.

All of which Gaines-Cooper failed it seems, to do. He still retained his cars, guns and pheasant shooting rights and many more things in Britain.

It must be remembered, that the Revenue enjoy the absolute right to issue an Assessment and a demand for tax: it is then up to the taxpayer to prove HMRC's estimates are incorrect. And now, HMRC's assessments can be raised on a global basis.

If the taxpayer argues, then if the matter is significant enough, the Revenue will run them right up to the Supreme Court! It's not their own money they are spending!

It must also be remembered that appeals and the like, in the civil court, can only be based on one single merit: that an inferior court erred in its interpretation and application of the body of law. Worth taking note of the Court of Appeal judges' comments: "nothing more than an illegitimate attempt to reargue the facts."

And most of the facts came from Gaines-Cooper.

Thus all you panicking Ex Pats can rest easy: unless you have harvested tens of millions, globe trotting the World and are a serial entrepreneur, with a distinct aversion to paying legitimate taxes and lack sufficient nous to carefully set-up your corporate and personal asset holdings arrangements, properly.[;-)]

As we say to our less organised clients often, "We aren't very good, sadly, at Post Event Tax Planning!".

Whilst posting I must take minor issue with two earlier comments: one from my old mate, John Eric!

[quote user="cooperlola"]

My, how my heart bleeds.

What is it with this idea that any government (not just the UK one) "takes" money from people?  Governments tax in order to re-distribute wealth and provide care and welfare for those less able to cope and provide for themselves.  You may not aprove of this - that is your right - but the idea that politicians take money from people is a little ridiculous.  Yes, there are corrupt politicians in the UK and they may line their own pockets in various ways, and that should be stopped, I agree.  However, part of their function is to care for everybody in the country which they govern, and to do this they do need to take more money from the rich than from the poor - thus welfare states work.  Without this we must rely upon charity and the generosity of indiviudals which - as history tells you from the days of workhouses and the like - cannot be guaranteed.

[/quote]

The Redistribution of wealth is a wondrous Liberal concept, which, of course, dates back to days of yore and in the UK, in fact, Lloyd-George’s “People’s Budget”: 1909.

Churchill, then of course a Liberal trumpeted “We are going to tax the rich as never before!”

In point of fact, the rich, employing the services of tax specialists (Well like me, I suppose![:)]) set up trusts and the like and carefully sheltered their wealth from the depredations of the government: which is why such as The Duke of Grosvenor still owns rafts of London’s prime property. Perhaps worse, the vast majority of the lands enjoyed by aristocratic families, whose lineage goes right back to grants awarded by Guilleme Normande, are mainly intact.

Any “Wealth” redistributed, has come 90% from the hard-working middle Englander and been given to the feckless: well, that worked well then didn’t it!

[quote user="woolybanana"]It is just 'these people' who go out and create new jobs and opportunities for others who we should be encouraging with lower taxes. High taxes and predatory taxing does not create wealth, nor do government servants in any guise.[/quote]

Again: nice idea!

Take one Sir Phillip Green and his wife, Tina: who are Monagasque residents. Some years back they declared a dividend of £1 billion: which was exported to Monaco free of any UK tax. And the tatt he sells is 99% manufactured in Asia………. And they have paid themselves huge dividends thereafter too.

Yet his stores and activities are firmly based in the UK: and shop-work is neither the best paid for the majority nor does it enjoy significant longevity.

As the much quoted saw suggests: “Patriotism is the last refuge of a scoundrel!”

Personally, I am fed to the teeth with the endless whining self-justifications of various groups, busy raping and pillaging Britain’s economy, about the work they provide; the wealth they create and the social benefits they have caused.

The statistics, facts and realities dispute such assertations.

Right! Back to the MS!

 [:)]

 

 

 

 

[Will]

"...what was found, was IR20 binds the Revenue to its defined

acceptance of UK Residency Guidance...

This is not a sudden bolt out of the blue: rather, the case has been going on for some little time..."

Obviously. IR20 has been replaced by HMRC6 since 5 April last.

And that seems a rather strange finding, as IR20 says "The notes... are not binding in law and do not affect rights of appeal..." followed by "Some practices explained in this booklet are concessions made by HM Revenue & Customs. A concession will not be given in any case where an attempt is made to use it for tax avoidance."

The replacement document, HMRC6 says, in its introduction: "However, this document only offers general guidance on HMRC's view of how the rules apply and does not have legal effect." It also states "This guidance outlines our (HMRC) view and interpretation of legislation and case law. The material is guidance only. It has no legal force, nor does it seek to set out regulation or practice. When it seeks to give practical examples of what the relevant law means, it contains HMRC interpretation

of that law. The guidance replaces IR20 Residents and non-residents: Liability to tax in the United Kingdom. Any practices associated with the IR20 – whether

overtly expressed or not – will not apply from 6 April 2009, unless provided for outside the IR20 (in statute law, in case law, in published extra statutory concession, or in a guidance note).

To some people, the gentleman concerned may be a hero, benefiting the general economy through his good works and enterprise. To the rest of us, he is a tax avoider and therefore a crook. His situation bears little or no resemblance to that of users of this forum.

I hope.

[Gluestick]

Will:

Two points.

The Gaines-Cooper matter was a back duty case: April 2009 is the present Tax Year: viz 06-04-09 to 05-04-10; thus the case was retrospective if you consider the dates of assessment. Thus IR 20 applies in the matter in question.

Additionally and critically, the core finding, would seem to bind HMRC to the ethos of their published advice: I quote PwC's Press Release:

"Sean Drury, international mobility partner, PricewaterhouseCoopers LLP (PwC), commented:

"We welcome some of the findings within judgment regarding the treatment of employees who work or are seconded abroad. The judgment clearly emphasised that HMRC should rely on UK tax residency guidance as outlined in IR20 and that employees were not required to sever family or social ties with the UK. Although the taxpayers lost on the facts of their cases, the court ruled that the guidance HMRC had issued was binding on HMRC. "

I am quite sure dear old John Whiting (Senior Tax Partner, PwC and past chair, CIT) would have cast his awesome beady eye over the release before allowing it to go!