FT.com / Media - Hands’ dilemma as Citi seeks court move.
The FT notes:
Guy Hands may face a dilemma over his tax planning if Citigroup succeeds in moving its legal dispute with his private equity group Terra Firma from New York to London.
What's the problem? Well, Guy Hands is one of those rather sad (in my opinion) people who claims to have left the UK for tax reasons and as a result he has apparently not been here since March 2009 for that reason.
If the case is in London he'll have to appear. And this creates considerable risk that his claim to be non-resident - one he clearly considers problematic because he's seeking to sustain it by complete absence - will fall apart.
Oh dear! It's so hard avoiding tax. How unfair that the legal system rebounds on him so unfortunately.
Another case for Millionaire Aid, it seems to me.
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I would have thought one day (or week, or month) in a court in London would not on its own establish residency. Don’t you have to be present for 183 days to be tax resident in the UK (or 91 if you’ve been resident in the recent past)?
As for it being hard to avoid tax, I think you’ll find most mega-rich people would describe it as like taking candy from a child.
@Peter
Coming for a day is no problem if you have not been resident
But when you’re trying to leave the UK things are very different
This whole area is also subject to massive uncertainty at present
There is a need for a statutory definition of residence in the UK – we do not have one
Work is progressing on it
The key issue is ensuring it is fair
Fair means it promotes tax compliance
Sometimes when I read about these 91/183 rules I wonder what happens when people don’t keep track on their days in different countries. Anyone knows? I believe HMRC asks for evidence when non-resident status is claimed, but what if boarding cards etc haven’t been saved?
I assure you HMRC can access all flight and travel documents to prove the point
Richard,
I always wondered how this worked. One can buy a plane or train ticket without any sort of ID, and I assume it is the sane when buying a passage on a ferry. There are no identity checks at airports and train stations when leaving the island.
Isn’it the reason why the governemnt was rolling out its e-border systems, which is still several years away from being operational (if it ever works).
If the governemnt admits it is unable to account for the whereabouts of thousands of illegal alones subject to deportation orders, and of hundreds of prisoners on parole, how can it track with precision the whereabouts of millions of ordinary taxpayers?
eg
I think you’ll find it really quite hard to move in and out of the UK unidentified
Of course one can abuse the system – and thousands do
But for most your name will appear on passenger lists, without fail
Not true in Europe maybe
The UK, yes
“I wonder what happens when people don’t keep track on their days in different countries. Anyone knows?”
Look at the case of Julian Robertson. (Search for this story in the Wall Street Journal)
“What a difference four days can make. Billionaire Julian Robertson won a $27 million tax case after he successfully argued that he wasn’t a New York City resident for the year 2000 and didn’t owe city taxes. At issue was Mr. Robertson’s whereabouts on four days during that leap year: April 15, July 23, July 31 and Nov. 16. The other 362 days were accounted for, with documentary proof of 183 days spent in the city and 179 spent outside. The New York State Department of Taxation and Finance argued that because he didn’t have documentary proof for the four days, he was therefore a resident and owed city taxes of $26,792,341.”
As for this trial, who says he has to be in court? That is what lawyers are for.
How many Richard Murphy’s are there in the UK?
Lots
Only one with my passport number
Whne was the last time you a) booked a flight b) travelled?
You may have noticed some issues relating to security
On many occassions a passport number is required to book
And try entering or leaving the UK without a passport. Have you notice3d those readers at borders? Do you think they don’t log the data? Do you think HMRC don’t have access (although I will confirm I understand they have to apply – it is not open to them at will)
Richard
I also believe my UK and Irish passports are linked in databases – byt cannot confirm for sure
@Richard Murphy
Richard,
I travel once or twice every week in Europe and once or twice intercontinental, and I confess I rarely book myself.
However I don’t seem to remember that one needs to give a passport or ID number to book flights to most European countries, and I am pretty certain none is required for Eurostar.
There are more controls to enter the UK (good!) but if you hold 2 or 3 citizenships you can probably play around a bit. I suspect your UK-Irish case might be a special because of these countries’s close collaboration on immigration.
So I take it as it was Mr Robertson who had to prove his whereabouts. Not IRS proving where he was.
HMCR6 sounds similar to this: “If you decide that you are not resident, or not ordinarily resident, or not domiciled in the UK we would expect you to be able to support your conclusions with details on how you have reached them.”
And I suppose “support your conclusions” means physical evidence.
Guilty until proven not guilty? Time to start holding on to the boarding cards
Thursten,
Given that there are no border controls to get in and out of New York City, it is up to the person to document where they are. Of course they cannot do this to everyone, but Mr. Robertson owns an apartment in New York City was well as an estate about 40 minutes outside the city. So the city used that to declare that he was a resident.