In A Taxpayer v HMRC [2022] TC08464, the First Tier Tribunal (FTT) held that caring for an alcoholic sister and her minor children were exceptional circumstances for the statutory residence test. The taxpayer remained non-UK resident despite spending too many days in the UK.

For the purposes of the Statutory Residence Test (SRT) days spent in the UK may be ignored if the individual’s presence in the UK is due to exceptional circumstances beyond their control.

  • The maximum number of days in any tax year that may be ignored is 60.

The taxpayer, who is not named in the decision, claimed she was non-UK resident for 2015-16.

  • She was UK domiciled and had moved to Ireland with her daughter on 4 April 2015. 
  • She claimed non-residency on the basis that six of the days she spent in the UK during the tax year should be disregarded as:
    • She was only present in the UK on those days due to exceptional circumstances outside of her control which prevented her from leaving the UK
    • She intended to leave the UK as soon as those circumstances permitted.
  • The exceptional circumstances occurred on two occasions, in December 2015 and February 2016, when she came to the UK to care for her twin sister and her minor children due to her sister suffering from alcoholism and being suicidal. The sister was admitted to rehab in April 2016 at which time her children were taken from her. There was a family history of abuse and suicide.
  • During this time the taxpayer's husband, who gave evidence in support of his wife, was charged with tax fraud.
  • HMRC assessed her to tax of £3,142,551 on £8m of dividends received during 2015-16. Their position was that she had not shown that the exceptional circumstances (which they agreed were present) prevented her from leaving the UK on each day in question as she had access to a private jet and could have returned to Ireland each evening.

The FTT found that all six days in question were due to exceptional circumstances and allowed the appeal.

  • The wording of the legislation is entirely clear and did not require the narrow purposive approach being sought by HMRC to exclude the ill-health of a sibling from the meaning of exceptional circumstances.
  • Exceptional circumstances can include foreseeable circumstances, being foreseeable does not mean they are within the control of the taxpayer.
  • The exemption does not preclude anyone who comes to the UK under a moral obligation or obligation of conscience to care for a family member. It is not restricted to coming to the UK under a legal obligation (e.g. to care for a child) or being prevented from leaving by a physical event, such as a volcanic eruption that prevents flights from taking off.
  • The exemption can apply if it is the exceptional circumstances that cause the taxpayer to come to the UK, as well as preventing them from leaving. It is not limited to where an individual already in the UK cannot leave due to circumstances arising during their stay.

The taxpayer’s recollection of the time in the UK under question was at times vague and inconsistent, which she attributed to the critical situation she found herself in, having to secure the safety and wellbeing of her sister and her children.

HMRC produced detailed evidence including restaurant and supermarket receipts which they said did not support her case, showing that she was not 100% engrossed with her sister and that her sister was not a genuine suicide risk.

The FTT agreed, describing some of her actions as odd, strange and implausible, and her behaviour before them as defensive and reticent, finding there was insufficient evidence that her sister was suicidal.

However, the FTT also found that the need to care for the sister and her children at a time of crisis caused by the sister’s alcoholism was sufficient to qualify as exceptional circumstances. The FTT accepted that the taxpayer would not have been in the UK at the end of each day relevant to the appeal but for the fact that she needed to care for her twin sister and her minor children, that this need prevented her from leaving the UK until such time as she had stabilised the situation, and that she intended to leave the UK as soon as possible once those circumstances permitted.

Useful guides on this topic

SRT: Statutory Residence Test
What is the statutory residency test? Why is it important and how does it work?

SRT: Day Counting Toolkit
This is a day-counting toolkit for the Statutory Residence Test.

SRT: Statutory Residence Test Toolkit
This is a freeview interactive tool to determine 'At a glance' whether you are UK resident or not in a tax year for 2013/14 onwards.

Non-resident Tax Toolkit
This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK. 

External link

A Taxpayer v HMRC [2022] TC08464 


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