Expats confused over their residency status need to take specialist advice before returning to the UK.
The latest expat to fall foul of residency rules is businessman Rupert Kimber, who has been fighting a £99,500 capital gains tax from HM Revenue & Customs.
He recently lost a First-Tier Tribunal case claiming a month-long visit to the UK after six years living and working in Japan did not count as a permanent return that classed him as a UK resident.
Shortly after he left the UK Kimber disposed of shares while in Italy that triggered the tax bill.
Kimber claimed he did not owe the tax because he was not a UK resident, but HMRC argued he was because the trip to the UK was to arrange a new job in Hong Kong, accommodation and to sort out family business.
Other recent court and tribunal decisions relating to residency hinge around whether someone has made a clean break from the UK.
This is generally taken to mean that the person leaving the country has given up their home and other links.
The length of time spent outside the UK is not relevant if HMRC can prove an expat still has ties to the country – even if days visiting the UK have been carefully counted to stay within non-residency rules.
In Kimber’s case, while in the UK, he enrolled his daughters in a school in Norfolk, viewed a property to rent as a family home and shipped the family’s furniture and belongings to the UK from Japan.
The tribunal ruled his evidence about stopping off on the way to move to Hong Kong job were implausible.
They found in favour of HMRC as Kimber became UK resident during the holiday in the UK as a result of the actions he took and intentions he formed during the trip.