The UK’s tax authorities have ruled that spending 90 days outside the UK is not the only determinant of whether a person is UK resident for ...

The UK’s tax authorities have ruled that spending 90 days outside the UK is not the only determinant of whether a person is UK resident for tax purposes. The ruling will cause consternation among the thousands of people who are non-UK resident for tax purposes. They have been led to believe by Inland Revenue guidance notes that the important thing is to count days out of the country. In a new case, Shepherd v HMRC, shows that this, on its own, is not enough to exempt an individual from paying tax within the UK. In the case, tax commissioners ruled that although Mr Shepherd, a professional pilot, spent 180 days in the tax year out of the UK on flights, 77 days in Cyprus where he rented a furnished flat, and only 80 in the UK in the family home, he had not made a distinct break with his former life and therefore remained resident for UK tax purposes. UK tax advisors have forecast a Revenue clampdown on individuals who are using increasingly accessible travel and second homes abroad to benefit from favourable tax rates by basing their claim on the 90-day rule.