Levene v Commissioners of Inland Revenue

JurisdictionUK Non-devolved
JudgeLord Warrington of Clyffe,Viscount Sumner,The Lord Chancellor,Lord Atkinson
Judgment Date09 March 1928
Judgment citation (vLex)[1928] UKHL J0309-2
Date09 March 1928
CourtHouse of Lords

[1928] UKHL J0309-2

House of Lords

Lord Chancellor.

Viscount Sumner.

Lord Atkinson.

Lord Buckmaster.

Lord Warrington of Clyffe.

The Commissioners of Inland Revenue.

After hearing Counsel for the Appellant, as well on Thursday the 26th as on Friday the 27th, days of January last, upon the Petition and Appeal of Louis N. Levene, of Park Palace, Monte Carlo, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 11th of March 1927, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be, reversed, varied, or altered, or that the Petitioner might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Commissioners of Inland Revenue, lodged in answer to the said Appeal; and Counsel appearing for the Respondents, but not being called upon; and due consideration being had this day of what was offered for the said Appellant:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 11th day of March 1927, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Lord Warrington of Clyffe .

My Lords,


The Appellant in this case claims relief from income tax for the financial years ending respectively on the 5th April, 1921, the 5th April, 1922, the 5th April, 1923, the 5th April, 1924 and the 5th April, 1925.


His claim falls under two heads:—(1) In respect of income payable in the United Kingdom on securities of British possessions and (2) in respect of income of British War Loan.


The claim under the first head is based upon Rule 2 (d) of the rules applicable to Schedule C:—

"No tax shall be chargeable in respect of the interest or dividends on any securities of … a British possession which are payable in the United Kingdom, where it is proved to the satisfaction of the Commissioners of Inland Revenue that the person owning the securities and entitled to the interest or dividends is not resident in the United Kingdom."


The claim under the second head is based upon Section 46 of the Income Tax Act 1918:—

"Where the Treasury have, before the commencement of this Act, issued or may thereafter issue any securities which they have power to issue for the purpose of raising any money or any loan with a condition that the interest thereon shall not be liable to tax or super tax so long as it is shown, in manner directed by the Treasury, that the securities are in the beneficial ownership of persons who are not ordinarily resident in the United Kingdom, the interest of securities issued with such a condition shall be exempt accordingly."


War Loan Stock was issued under the condition mentioned in the Section.


In order therefore to support his claims it was incumbent on the Appellant to prove that in the one case he was not resident, and that in the other he was not ordinarily resident in the United Kingdom.


His claims having been rejected by the Commissioners of Inland Revenue he appealed to the Special Commissioners for Income Tax.


They expressed their decision in the following terms:—

"These" (viz., the questions they had to decide) "are in our opinion questions of degree, and taking into consideration all the facts put before us in regard to the Appellants past and present habits of life, the regularity and length of his visits here, his ties with this country, and his freedom from attachments abroad, we have come to the conclusion that at least until January, 1925, when the Appellant took a lease of a flat in Monte Carlo, he continued to be resident in the United Kingdom."


It will be observed that they do not in express terms state that he continued to be ordinarily resident here, but, from the terms in which they state the questions they had to decide, it is clear that the decision was intended to cover both cases.


At the request of the Appellant the Commissioners stated a Case for the opinion of the High Court. The Case came before Rowlatt J. on the 23rd July, 1926, who affirmed the decision of the Commissioners and dismissed the appeal.


An appeal to the Court of Appeal was dismissed by an Order dated the 16th March, 1927.


It is not quite clear whether the Commissioners intended their decision to be a finding of fact or a conclusion of law. If it were the former there is at least ground for saying that it was not open to appeal, but as the case was argued in both Courts below and in this House upon its merits, I think I ought to state shortly my reasons for thinking the decision was correct.


The Appellant is a British subject. Down to March, 1918, he had a permanent home in London. In that month he sold his furniture and in April he surrendered the lease of his house. He continued however to live in England in various hotels until December, 1919. So far there is no question that he was both resident and ordinarily resident in the United Kingdom.


He is married but has no children. His family ties are in this country, his wife having five sisters and he himself six brothers and sisters residing here.


Apparently under medical advice to the effect that he and his wife should live in the South of France and avoid the United Kingdom in the winter months, he and his wife in December, 1919, went abroad. They returned to this country on the 10th July, 1920. From that day until the 24th November 1920, they remained in England. They then again went abroad until the 2nd July, 1921, when they returned here and stayed until the 27th November. They then went abroad. On the 9th April, 1922, they returned to England where they stayed until the 18th June. They were abroad until the 10th September. From that day until the 19th November they stayed here. They then went abroad and remained there until the 12th April, 1923. On that day they returned and stayed in this country until the 27th June. They then went abroad returning on the 10th September and staying here until the 15th November. They were abroad from that day till the 10th April, 1924, when they returned here and stayed until the 1st July. From that day until the 10th September they were abroad. They then returned and stayed until the 23rd November when they again went abroad. In no year of assessment did their stay here extend to six calendar months. While abroad they had no settled home but lived in hotels at Monaco and at various places in France. In England also they lived in hotels. The Appellant states that he intended throughout to live abroad, but his intention does not appear to have been of a very pressing character, for, though he made in the course of the years 1922 to 1924 endeavours to find a suitable flat he did not succeed until January, 1925. Since he gave up his house in 1918 he has had no intention of again taking a house or flat in the United Kingdom. He stated to the Commissioners various reasons for his visits to England—to obtain medical advice—to visit relatives—to take part in certain Jewish religious observances—to visit the graves of his parents—to deal with his income tax affairs.


These being the facts the question is whether the Commissioners the King's Bench Division and the Court of Appeal were wrong in the conclusion at which they respectively arrived.


I do not attempt to give any definition of the word "resident." In my opinion it has no technical or special meaning for the purposes of the Income Tax Act. "Ordinarily resident" also seems to me to have no such technical or special meaning. In particular it is in my opinion impossible to restrict its connotation to its duration. A member of this House may well be said to be ordinarily resident in London during the Parliamentary session and in the country during the recess. If it has any definite meaning I should say it means according to the way in which a man's life is usually ordered.


In the present case, taking the several years of assessment in succession, in that ending the 5th April, 1921, there is no substantial difference between the nature of his residence abroad and that of his residence here except that the former was for a longer period. He did in fact, what many wealthy people do at the present time, he spent the winter and spring, and in this particular instance the early summer, abroad and the rest of the summer and the autumn here, again going abroad for the winter. In the year ending the 5th April, 1922, there was no substantial change, but in those ending the 5th April, 1923, and the 5th April, 1924, we find a change to this extent that he now returns to this country in April, goes abroad for the usual summer holiday, and returns to this country till the winter season comes round again. I will assume that, for the purpose of determining whether in any year he is ordinarily resident, the usual ordering of his life must be judged by what he does in that and preceding years only, still in the first year the circumstances show that the stay in England was as much in the ordinary course as his previous residence, and in subsequent years he developed habits of periodical changes of abode each one of which may be said to be in accordance with the usual ordering of his life.


I have not thought it necessary to rest my opinion upon the third of the general rules applicable to all Schedules but it is difficult to see any answer to the case of the Respondent under it. The Appellant is a...

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