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An investment banker working on a deal in Belgium failed to convince the Court that he was non-resident for tax purposes in the First Tier Tax Tribunal case of Paul Daniel (TC03312).
The Tribunal described this as a “hard fought” residence case and no wonder – during the tax year in question, Mr Daniel had realised a capital gain of £20 million and was also liable for income tax of £5 million.
The main issue was whether Mr Daniel had left the UK to work full-time in Belgium on a deal for Sainsbury’s.
As more than six years had passed, HMRC also needed to demonstrate that he had been ‘negligent’ in claiming non-residence, otherwise they were not entitled to make a discovery assessment.
The very long judgment includes virtually a day-by-day breakdown of where Mr Daniels was and what he had been doing during the tax year in question. The Tribunal concluded that he had not been working full-time in Belgium for the following reasons:
The Tribunal also decided that Mr Daniel had been negligent in simply stating that he was non-resident on the basis of full-time work abroad without giving any further thought to the matter. They said he must have known that he was not engaged in full-time work in a ‘conventional’ sense.
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