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It is an enduringly popular misconception that all you need to do in order to establish that you are not UK resident for tax purposes is spend fewer than 90 days per year in this country. However, the true position is much more nuanced than that, as one couple discovered to their cost.
The couple had decided to seek sunnier climes after one of them was seriously injured in a road accident. They argued that they had departed the UK in 2006 and had made their permanent home in Monaco. Having read HM Revenue and Customs (HMRC) guidance that was then in force, they had studiously ensured that they never spent more than 90 days a year in the UK.
HMRC, however, took the view that the couple had never lost their UK residency and issued closure notices on that basis in respect of five tax years. In rejecting the couple's challenge to that decision, the First-tier Tribunal noted that it is possible to be resident in more than one country at the same time and found that they had never made a 'distinct break' from the UK.
Although after 2006 they had spent three quarters of each year in Monaco, they had retained their home and other properties in Britain. They had not arranged to have their post sent on to Monaco and they still had UK bank accounts and credit cards. They had also retained social ties in Britain and, when they were in the country, they went about their lives much as they had done previously. The regularity of their physical presence in the UK indicated a degree of permanency and continuity sufficient to amount to residence.