Nicholas Ogden was resident in Jersey. He was employed by his own company which was subsequently taken over by RBS. His son became critically ill and needed treatment in the UK. Mr Ogden took compassionate leave from his employer to accompany his son. He had telephoned HMRC and had been assured that, “It should be alright.” Mr Ogden ended up being in the UK for more than 183 days in that tax year. He also lost his job that year (due to the takeover) and received a termination payment. He thought it would not be taxable in the UK due to his non-Resident status.
HMRC assessed him on the full amount of the termination payment on the basis that he had been resident in the UK during the relevant tax year – as he had spent more than 183 days there.
The Tribunal found that HMRC were correct and Mr Ogden’s appeal was dismissed.
The 183 day rule is absolute and sometimes exceptional measures have to be taken to avoid breaching it. But where it is breached (even in exceptional circumstances) the taxman knows no mercy.
Lynam Tax domicile specialists have decades of experience in dealing with tax residence and domicile issues.
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