The two-day hearing took place last Wednesday and Thursday, according to the Supreme Court’s website and members of his legal team, which includes Gaines-Cooper’s barrister, Lord Grabiner QC, and his solicitors, Squire, Sanders Hammonds (SSH). Gaines-Cooper attended the hearing, according to Peter Vaines, who headed up the appeal on behalf of SSH.
It is not known when the Supreme Court will announce its judgement in the case, but the usual time period is about “two to three months”, Vaines said. Given that the court does not sit in August, this could mean an October or even November conclusion to the long-running Gaines-Cooper v HMRC saga.
Describing last week’s hearing, Vaines said, "the arguments were put on both sides, their lordships asked lots of questions, and [now] they’re going to think about it.
"We were happy with the way our arguments were put."
As reported, Gaines-Cooper was granted leave to appeal to the Supreme Court in August 2010, after having been ruled a UK resident in spite of having lived in the Seychelles for more than 30 years.
This followed the UK Court of Appeal upholding a multi-million-pound ruling six months earlier against Gaines-Cooper, and in favour of HMRC.
The finding that he remained eligible for UK taxes even though he had lived in the Seychelles since 1976 and had never breached the so-called 91-day rule was seen as having major potential implications for other wealthy expatriates who had considered themselves exempt from UK taxes.
In the case of Gaines-Cooper, the Court of Appeal judges found that England had remained “the centre of gravity” of Gaines-Cooper’s “life and interests”, even though he technically lived abroad for decades. His estate in Oxfordshire and other ties suggested that he had not severed his social and family ties with the UK, they said.
News of last week’s Supreme Court hearing comes less than a month after HM Treasury released a major consultation on a proposal to establish, for the first time, a statutory definition of UK residence for tax purposes.
The residency consultation had been eagerly awaited by UK tax experts and their clients, many of whom, like Gaines-Cooper, have struggled with the current system of establishing UK residency and non-residency. It is largely based on legal cases decided by the courts over many decades, and is widely regarded as vague, antiquated and potentially subjective.
Unless the Treasury agrees to make changes to its proposed residency formula, however, Gaines-Cooper and others who have been caught in HMRC’s net will not stand to benefit, since it specifically states that cases arising before it takes effect — 6 April 2012, at the moment — would not be affected, Vaines noted.
[For a detailed analysis of the UK Treasury’s proposed consultation on residency by Gerry Brown, Prudential International’s head of trusts and taxation, see pages 31 and 32 of the current issue of International Adviser, which may be read as an e-edition by clicking here.]