The Commissioners for HMRC v A Tax Payer
[2023] UKUT 182 (TCC)
Darryn Lyons v The Commissioners for HMRC
9 March 2023
[2023] UKFTT 294 (TC)
First-tier Tribunal
Mr. Lyons moved to Australia but argued he wasn't UK tax resident anymore. The judge looked at all the facts – his home, businesses, family and friends – and decided he was still UK resident for part of the year, so he had to pay the tax.
Key Facts
- •Mr. Lyons appealed a capital gains tax assessment of £1,087,413.68 for the sale of UK properties in 2012-2013.
- •The appeal hinged on whether Mr. Lyons was UK tax resident during any part of 2012-2013, before the statutory residence test (SRT).
- •Mr. Lyons argued he ceased UK residency before April 6, 2012, and subsequent UK presence was temporary under s9(3) TCGA 1992.
- •HMRC contended Mr. Lyons was UK resident for at least one day in 2012-2013.
- •Mr. Lyons spent 38 days in the UK during the 2012-2013 tax year.
- •Mr. Lyons had significant ties to Australia, including a home and business interests, before and after the period in question.
- •The Tribunal considered evidence of Mr. Lyons's actions in 2011-2012, including property sales, business activities, and relocation efforts.
Legal Principles
Pre-SRT residence determined by common law principles, focusing on whether the individual ceased to have a settled or usual abode in the UK.
R (oao Davies) v HMRC [2011] STC 2249; Gaines-Cooper
Section 9(3) TCGA 1992: An individual temporarily in the UK without intent to establish residence is only liable for capital gains tax if they spend at least 183 days in the UK.
TCGA 1992
Residence is a question of fact and degree, considering conduct in prior and subsequent years.
Levene v IRC [1928] AC 217; IRC v Lysaght [1928] AC 234
A multifactorial enquiry is necessary to determine if there has been a substantial loosening of ties to the UK.
Gaines-Cooper
The availability of living accommodation in the UK is a factor to consider, but not determinative.
Cooper v Cadwalader; Levene v IRC [1928] AC 217
Outcomes
Appeal dismissed.
The Tribunal found that Mr. Lyons had not substantially loosened his ties to the UK before April 6, 2012, despite increasing connections to Australia. His continued UK property ownership, business interests, and personal connections were deemed sufficient to establish UK residency for part of 2012-2013.