Gaines-Cooper – Supreme Court decision on tax residence

16 January 2012 |

Mr Gaines-Cooper has lost his appeal in the Supreme Court, which agreed with the Court of Appeal’s decision that he had not ceased to be resident in the UK for the years under dispute.


This case centres on the IR20 booklet, which was the Inland Revenue’s (now HMRC) guidance on UK residence.

The issues

Mr Gaines-Cooper claimed non-resident status in the UK on the grounds that he had left the UK to live abroad and that the number of days he spent in the UK in every year since his departure were within the permitted amount of days set out in IR20 for continued non-residence.  He claimed that as he adhered to the rules within HMRC’s own guidance, it should be bound by such guidance and accordingly it should agree that he was not UK resident.

HMRC agreed that it was bound by IR20 (and its guidance generally) where that guidance was applicable to the situation.  However, it claimed that the paragraphs in question referred to people who have made a distinct break with the UK and that the day counting test is only of relevance once non-residence has been achieved.  In its view Mr Gaines-Cooper had not made a distinct break with the UK and therefore had remained resident in the UK.

The Decision

Although it was recognised that the paragraphs of IR20 in question were badly drafted, the Supreme Court held that IR20 would enable “an ordinarily sophisticated taxpayer’” to understand that there was a requirement for a distinct break with the UK to establish non-residence.  Due to Mr Gaines-Cooper’s ties with the UK, he was unable to demonstrate a distinct break and therefore the day counting test did not apply.

Mr Gaines-Cooper is considering an appeal to the European Court of Justice.


This judgment provides some clarity to taxpayers in as much as they have a legitimate expectation that HMRC will be bound by its own guidance.

With the proposed introduction of the statutory residence test in 2013 the effects of this case may be reduced.


For further information or to discuss the issues raised, please get in touch.


Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Related content

13 June 2024
How to apply for certificate of residence in the UK
Where an individual is resident in the UK and has…
29 May 2024
UK Share Plan Reporting 2024: Everything you need to know
The deadline is approaching for the HMRC’s annual return filings…
20 May 2024
Employee Share Plan Reporting 2024: Alerting Your Clients
The UK tax authorities’ (HMRC) submission deadline for annual return…
Subscribe to our newsletter
Stay up to the minute on our latest news and insights?
International reach

We have helped clients meet their HR needs in over 70 countries across five continents.