Kevin McCabe v The Commissioners for HMRC

Kevin McCabe v The Commissioners for HMRC

Mr McCabe did not effect a sufficient loosening of ties with the UK to constitute a distinct break in his pattern of life. He retained significant business, family, and social connections with the UK, continued to exercise control over UK businesses, and maintained frequent and regular visits. Under the DTC, he had permanent homes in both countries, but his centre of vital interests remained in the UK due to the preponderance of personal and economic relations. Alternatively, if centre of vital interests was indeterminate, his habitual abode was not exclusively in Belgium. Therefore, he remained UK resident for the relevant period and is not entitled to treaty relief.

Parties
Appellant: Kevin McCabe; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
30 September 2022
Procedural Posture
Tax Appeal / First Tier Tribunal (tax Chamber) Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Residence Status, Double Taxation Convention, Capital Gains Tax, Statutory Interpretation
Tax Law International Taxation Income Tax Residence Status Double Taxation Convention Capital Gains Tax Statutory Interpretation

Case Brief

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Parties

Kevin McCabe

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

  1. 1 Whether the appellant ceased to be resident in the UK for tax purposes on or after 4 April 2006
  2. 2 Whether the appellant is entitled to be treated as non-UK resident under the UK-Belgium Double Taxation Convention for the relevant period

Ratio Decidendi

Mr McCabe did not effect a sufficient loosening of ties with the UK to constitute a distinct break in his pattern of life. He retained significant business, family, and social connections with the UK, continued to exercise control over UK businesses, and maintained frequent and regular visits. Under the DTC, he had permanent homes in both countries, but his centre of vital interests remained in the UK due to the preponderance of personal and economic relations. Alternatively, if centre of vital interests was indeterminate, his habitual abode was not exclusively in Belgium. Therefore, he remained UK resident for the relevant period and is not entitled to treaty relief.

Court Disposition

Appeal dismissed

Orders

  • Mr McCabe's appeal against the closure notices for 2006-07 and 2007-08 is dismissed in principle. Quantum of tax due is reserved pending determination of residence.