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:

  1. He did not physically spend enough time in Belgium to carry out a full-time role.  He spent a lot of time in London and, basically, claimed that while he was in London he never did any work and spent time with his family but while he was in Belgium he worked furiously to fit a full-time job into a small number of days.  The Tribunal said this was ‘improbable’; and further
  2. The applicant had no corroborative paperwork at all covering the period in question and claimed his computer was buried in Belgian landfill.  The Tribunal hinted that it was possible the evidence may have been destroyed.

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.