According to the tribunal, the pilot, Lyle Grace, failed to sufficiently demonstrate that he had made a clear break from the UK.
The case is the latest “in a string of claims for non-UK residence which have been decided in favour of HMRC”, according to Patricia Mock, a director in the private clients practice at Deloitte.
Grace’s ownership of a house in Horley, near Gatwick Airport, which he used for brief stopovers during his work as an international pilot, emerged as a key factor in the tribunal’s decision, according to a release on Deloitte’s website.
"His employment with [a] British airline, the amount of time he spent in the UK, the frequency of his short visits and the fact that when in the UK he stayed at his own property rather than in a hotel were all considered by the tribunal in [arriving at its] conclusions," the Deloitte release said.
Mock noted that the Grace case as well as other recent cases – including Shepherd v Revenue and Customs Commissioners, and the Robert Gaines-Cooper v HMRC case (which is still under appeal) – show the “increasing scrutiny” HMRC is now paying when it considers the tax affairs of those who claim to have ceased to be UK resident.
“The fact pattern is all important, and this case underlines the need for those wishing to be treated as non-UK resident to be able to demonstrate that contact with the UK has been severed in favour of new ties with another country.”
The Grace case
As previously reported by International Adviser, Grace was born in South Africa, and traveled on a British Overseas Citizens passport. He claimed South African residency in spite of having married, in South Africa, a UK citizen who returned home with their two children in 1978.
“Presence in the United Kingdom in order to fulfill duties under a permanent, or at least indefinite, contract of employment cannot be described as casual or transitory,” the Hon. Justice Lewison wrote in a decision in November 2008.
As for Grace’s house in Horley, unlike a hotel room, it “actually belonged to him and unlike a hotel room, no one else used it”, Justice Lewison added.
