International businessman Robert Gaines-Cooper has failed to persuade the Court of Appeal that he has changed his UK domicile.

We read a lot in the UK press about “non-doms” and how they don’t pay their fair share of tax. Recent legislation has made it more difficult for “non doms” to benefit but as usual the only people who are seriously affected are not those at whom the legislation was aimed.


To get a grip on this subject you need to understand that there is a distinction between “domicile” and “residence” and that whilst international agreement sets out a person’s “domicile of origen” there is no legal agreement on how that domicile might change.

To explain very briefly a persons normal domicile of origen is the country in which their father was born but they can be resident elsewhere. For example I was born in the UK as was my father and so would be considered domiciled in the UK. Strictly speaking as we were both born in Scotland, which although part of the UK has a separate legal system, I am properly described as being of Scottish domicile, but let’s not split hairs.

However as I have been resident in the Isle of Man for several years HM Revenue & Customs accept that I am “non resident” in the UK and so only pay tax in the Isle of Man. However they would maintain that I am still domiciled in the UK which means that when I die my estate would have to pay Inheritance Tax at 40%. In addition there can also be issues over some sorts of income which although not taxable on non residents can be taxable on domiciled individuals.

Now whilst it is technically possible to change domicile it is very difficult to achieve this because HMRC don’t want to let go of tax, not so much from someone like me who won’t have much to leave but from high-earning “tax exiles”.

The problem is that there are no actual rules or legislation which sets out what evidence you need to provide HMRC of your change of domicile. Things such as buying a burial plot in your new domicile and severing all ties with your old domicile are arguments which sometime work and sometimes don’t.

So it’s interesting to consider the case of Mr Gaines-Cooper, a globe-trotting entrepreneur who is now facing a multimillion-pound tax bill after failing to persuade senior judges that he has non-UK domiciled status. Despite living in the Seychelles for over thirty years, and wishing to have his ashes scattered there when he dies, his ties with the UK still remain strong. He has been, and is still, a frequent visitor to the UK and has retained property and investments here. His second wife and son also reside in the UK.

Justice Rimer sitting with Lord Justice Wilson in the Court of Appeal in London dismissed a proposed appeal as “nothing more than an illegitimate attempt to reargue the facts”.

Although Mr Gaines-Cooper has a house in Henley-on-Thames, Oxfordshire, where he keeps his collection of paintings, classic cars and guns, he maintains that he “fell in love” with the Seychelles as long ago as 1976 and bought a French-style plantation house there, which he renovated at a cost of $2.5 million. It was perverse, he argued, that he was not recognised as a “non-domiciled” by the tax authorities when he has not been “ordinarily resident” in Britain since the mid-70s.

The case has attracted much attention throughout the tax profession and has been of great interest to other non-domiciled individuals because it demonstrates just how difficult it is for someone with a UK domicile of origin to shake off that domicile and establish domicile overseas.

Of course although you might think it would therefore be difficult for HMRC to argue that a person who makes a permanent home in the UK automatically becomes UK domiciled that is something that they are increasingly trying to do. A clear case of wanting your cake and eating it.

Mr Gaines-Cooper does have one final glimmer of hope – last month a separate judicial review was heard by Mr Justice Lloyd Jones and judgment is awaited by a whole lot of people. I think it will go against Mr Gaines-Cooper but we shall see. His mistake? Keeping a house in Henley.

See Also:

What is the Difference Between Residence & Domicile?

The Remittance Basis of UK Taxation- What It Means for Persons Entitled to Claim Non Domicile Status

Category: Taxation

5 Responses to “Domicile – Having Your Cake and Eating It”

  1. James Green says:

    I’m not sure what the point of your comment is Trevor. Your domicile of origin is taken from the applicable legal jurisdiction. As you point out there are three separate legal jurisdictions in the UK. Scotland, Northern Ireland and England & Wales (a single jurisdiction).

    There is no such thing as “UK Domicile”. Anyone with a Scottish Domicile will always be “UK Domiciled” as long as Scotland remains in the UK. If Scotland were ever to leave the UK they would no longer have UK Domiciled Status but a stand-alone Scottish Domicile and be termed “Scottish Domiciled”. Of course that begs the question of the status of the very many Scots living and working in England, Wales or Northern Ireland.

  2. Trevor Taylor says:

    The article states. “we were both born in Scotland, which although part of the UK has a separate legal system”
    Seperate legal systems from where; seperate from the UK?
    England and Wales have one legal system and Scotland has another but they are not seperate from the UK (yet at any rate),

  3. James Green says:

    I would have thought that you could get information from the Land Registry to show who owns the house. If it is a UK company you will find details at Companies House regarding ownership of the company, directors etc. If it is an offshore company you are probably not going to get much further without a court order – which only a few offshore jurisdictions will pay heed to. From a tax domicile point of view it makes no difference anyway, but you seem to want to know for another purpose.

  4. John Galt says:

    I’d be interested to learn who owns the residence in Henley-on-Thames, Mr Gaines-Cooper or one of his companies? If a company, is it a UK or non-UK one?


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