UK Courts Rule Against HMRC


By Global Tax Weekly

HM Revenue and Customs is a revenue authority I don’t feel at all sorry for, after it lost a case recently regarding its powers to tax those who have long since left British shores to pursue a life in greener pastures.

The somewhat unique and often vague concept in British law of tax domicile, which exists alongside tax residence, has probably muddied the waters sufficiently to embolden HMRC to go after those living abroad even when they have only tenuous links with the UK. But it has possibly made the tax authority a little over confident in its claims to tax both British expats and foreign-born individuals who have spent time living, working, and investing in the UK but no longer have ties there. So, in an age when some officials don’t seem to think twice about exercising their powers extra-territorially, the High Court’s ruling represents a welcome reminder, at least as far as HMRC is concerned, that the tax authority’s powers do actually stop at the border.

Not only this, but surely there’s an issue of natural justice at stake here too. UK-born expats lose their right to vote in UK elections after 15 years of expatriation. Yet HMRC’s claim to tax them doesn’t appear to have a commensurate expiry date. A classic case of taxation without representation?


For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look





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