Robert Gaines-Cooper v Her Majesty's Revenue & Customs, SPC 00568
| Jurisdiction | UK Non-devolved |
| Judge | Dr A Nuala BRICE |
| Judgment Date | 31 October 2006 |
| Respondent | Her Majesty's Revenue & Customs |
| Appellant | Robert Gaines-Cooper |
| Reference | SPC 00568 |
| Court | First-tier Tribunal (Tax Chamber) |
SPC00568
INCOME TAX – preliminary issues – domicile, residence and ordinary residence in tax years 1992/93 to 2003/2004 – Appellant purchased house in the Seychelles in 1975 and obtained a residency permit in 1976 – Appellant indirectly retained house and assets in England – latterly the Appellant’s wife and son resided in England – whether the Appellant retained his domicile of origin in England – yes – or whether Appellant acquired a domicile of choice in the Seychelles – no – whether the Appellant was resident in the United Kingdom – yes - whether the Appellant was ordinarily resident in the United Kingdom – yes – appeal on the preliminary issues dismissed – ICTA 1988 s 336
THE SPECIAL COMMISSIONERS
ROBERT GAINES-COOPER
Appellant
-
and –
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS
Respondents
SPECIAL COMMISSIONERS: Dr A N Brice
Charles Hellier
Sitting in London on 26 June – 7 July 2006
Michael Flesch QC with Nicola Shaw of Counsel, instructed by Messrs Squire, Sanders & Dempsey, Solicitors for the Appellant
Ingrid Simler of Counsel with Akash Nawbatt of Counsel, instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2006
DECISION
The appeals
1. Mr Robert Gaines-Cooper (the Appellant) appeals against a number of assessments, amendments to self-assessments and notices which relate to the tax years 1992/93 to 2003/04 inclusive and which were issued by The Commissioners of Her Majesty’s Revenue and Customs (the Revenue). The appeals concern the liability of the Appellant for income tax under Case VI of Schedule D either under sections 739 to 746 of the Income and Corporation Taxes Act 1988 (the 1988 Act) (which sections concern the transfer of assets abroad) and/or sections 660A to 660G of the 1988 Act (which sections concern settlements and the liability of the settlor).
2. There was no assessment or amendment of a self-assessment for the tax year 1999/2000 as it was understood that the Revenue’s enquiries for that year were still continuing. The parties agreed that it was sensible for us to make findings about the Appellant’s domicile, residence and ordinary residence for that year as well as all the others. However, the Appellant reserved the right to argue, if it became relevant to do so, that any assessment or amendment of self-assessment for that year did not comply with the relevant time limits.
The preliminary issues
3. It was agreed at an early stage of these appeals that the issues of the domicile, residence and ordinary residence of the Appellant should be heard as preliminary issues. It was the Appellant’s case that he abandoned his domicile of origin in England and acquired a domicile of choice in the Seychelles well before 6 April 1992 and that he retained that domicile of choice ever since. Although the Appellant agreed that he was resident in the United Kingdom for the tax year 1992/93 it was his case that, as far as the other tax years under appeal were concerned, he was neither resident not ordinarily resident in the United Kingdom.
4. Accordingly, the preliminary issues we have to determine are:
(1) whether the Appellant was domiciled in England during the tax years from 1992/93 to 2003/04;
(2) whether the Appellant was resident in the United Kingdom during the tax years from 1993/94 to 2003/04; and
(3) whether the Appellant was ordinarily resident in the United Kingdom during the tax years from 1992/93 to 2003/04.
The evidence
5. There was a short statement of agreed facts. One bundle of documents was produced by the Appellant and four other bundles were produced by the Revenue. A sixth bundle, containing copies of the Appellant’s passports, was produced during the course of the hearing. Oral evidence was given by the Appellant on his own behalf and oral evidence was also given on behalf of the Appellant by:
Mr Victor Loh Beng-Seng, the Chief Executive Officer of Vicplas International Limited of Singapore;
Mr David Curtis-Bennett, the Managing Director of Chelle Medical Limited of the Seychelles; Mr Curtis-Bennett was also connected with other companies associated with the Appellant;
The Right Reverend French Chang-Him, now retired but previously the Bishop of the Diocese of the Seychelles and the Archbishop of the Indian Ocean;
Mrs Jane Gaines-Cooper, the wife of the Appellant;
Mr Michael Landon, the Managing Director of Venner Trading SA (formerly LMA International SA Group) of Jersey;
Sir James Mancham, the Founding President of the Republic of the Seychelles from 1976 when the Seychelles received independence from the United Kingdom;
Mr Guy Joseph Morel, now retired but before 1993 the Secretary of State for Finance in the Seychelles;
Mr John Pugh, the first British High Commissioner to the Seychelles in 1976; and
Mrs Marie Therese Geva René the Chairperson of the National Council for Children in the Seychelles.
6. A witness statement by Ms Sara Walter, solicitor, containing evidence on behalf of the Appellant was agreed by the Revenue and so admitted in evidence.
7. Before finding the facts we comment on the evidence of the Appellant. The Appellant gave evidence for four and a half days of the ten day hearing. As many of our findings depend upon his oral evidence we have to say how we found him as a witness. We accept that the Appellant did his best to be truthful and honest but he also readily admitted that he made mistakes. For this reason we looked for corroborating documentary evidence but an unusual feature of this appeal was that much of the oral evidence of the Appellant was digressive and discursive and unsupported by any documents. Some of the evidence related to events as far back as 1971 which is now thirty-five years ago. The Appellant had an impressive memory but was not always certain about dates. We accept that some uncertainty about dates is to be expected after such an interval of time.
8. However, the Appellant also sometimes appeared to confuse one of his business ventures with another. The Appellant told us that he had set up (with other business associates) probably in excess of 100 companies all over the world. The names of very many companies were mentioned in oral evidence but not with great precision and without reference to documents. The same comment applies to trusts. A number of different trusts were mentioned but full supporting documentation was not produced. For the purpose of these preliminary issues absolute accuracy about dates and the names of the Appellant’s companies and trusts is not required. Where appropriate, therefore, we have referred to dates as approximate dates and to companies and trusts descriptively rather than by specific names because we are not confident that all the dates and names given in oral evidence were accurate.
9. For these reasons we approach the oral evidence of the Appellant with some caution. We bear in mind that the burden of proof in these appeals is on the Appellant.
The facts
10. From the evidence before us we find the following facts for the purpose of these preliminary issues only.
The Appellant
11. The Appellant was born in Reading in England on 27 September 1937 and attended school in Berkshire, England. He still retains his British passport. Both the Appellant’s father and mother were Officers of HM Inland Revenue. The Appellant’s mother, Mrs Flora Gaines-Cooper, lived in Berkshire, England until her death in 2004. The Appellant’s only sibling, his sister, still lives in England. After leaving school in 1954 the Appellant undertook his National Service in the Royal Air Force and was posted to Cyprus between 1955 and 1957. He enjoyed spending time in Cyprus and he also enjoyed the Mediterranean climate.
1958 – The juke-box business
12. In 1958, shortly after completing his National Service, the Appellant started a business in the United Kingdom which was carried on through companies called the Gainesmead Group. The business consisted of placing juke-boxes in public houses, caravan parks and other sites in England and supplying background music. The Appellant obtained contracts with most of the major brewery chains to supply juke-boxes to their public houses. During the rest of the 1950s, and in the 1960s, the business became successful.
1964 – Grove House
13. In 1964 the Appellant purchased for £11,100 a property known as Old Grove House (Grove House) at Emmer Green near Reading, Berkshire. The Appellant’s mother also lived at Emmer Green. Grove House was a five-gabled house with four bedrooms and with an area of about 4,000 square feet. It was built of brick and flint in about the 14th century and was a listed building. The garden extended to about 0.6 acres. In the grounds was a 250 year old tithe barn of about 2,500 square feet. However, the buildings were in a bad state of repair. The Appellant restored the house and moved into it in 1966.
1971 - The Appellant’s assets transferred to the Isle of Man
14. In 1971 the Appellant sold the Gainesmead Group (at a considerable profit) to Management Agency and Music plc and joined that company as finance director.
15. Some time in about 1971 the Appellant...
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