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Update:corporation tax

Paul Christian reviews the definition of non-residence for tax purposes, entrepreneurs' relief, changes to SDLT on residential property, the construction industry scheme and retrospective legislation

15 June 2010

The ruling in Gaines-Cooper (R on the application of Davies, James & Gaines-Cooper) v HM Revenue & Customs [2010] EWCA Civ 83 is one of those rare tax cases that has attracted national attention.

The case concerned residence of individuals for tax purposes. The underlying problem is that there is no statutory definition of non-residency for tax purposes. To help people, Inland Revenue published guidance, known as IR20 (and since replaced by HMRC6) setting out its views on non-residency.

IR20 set out that there are two ways to become non-resident, either to leave the UK to take up foreign employment for a full tax year or to leave the UK “permanently or for an indefinite period”. Although there were issues on the former method discussed in the case, the real issues of interest are on the latter.

The guidance then set out a ‘days test’ which said that, if the taxpayer was non-resident, to remain non-resident the taxpayer had to limit visits to the U...

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