Jurisdiction(s):
United Kingdom

Court of Appeal restores FTT: family illness counts as ‘exceptional circumstances’ under statutory residence test; Irish-resident not UK-resident, so HMRC cannot tax £8m dividends

Published on: 17 February 2025

Published by a Law360 reporter

Legal News

Article summary

The court rejected the Upper Tribunal (UT)’s stance and affirmed a First-tier Tribunal (FTT) ruling that concluded the woman, identified in the judgment as P, was not UK-resident, even though she spent more than 45 days here in the relevant tax year, the benchmark for the test at issue in the case. It accepted the FTT’s conclusion that 6 of the 50 days she was in the UK arose from ‘exceptional circumstances’. Those six days are excluded from the count, the court held, so HMRC cannot levy tax on the £8m of dividends for that tax year. The woman relocated from the UK to Ireland in April 2015, shortly before the outset of the 2015–16 tax year, while her husband continued still to reside in their family home near Manchester...

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