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24 February 2010 Tax exiles 'could face retrospective tax bill'

UK citizens who live abroad as tax exiles could find themselves facing a retrospective tax bill stretching back as far as the previous six years, following a recent Court of Appeal ruling.

The case involved businessman Robert Gaines-Cooper, who has lived in the Seychelles since 1976. Despite this fact, the judges in the case ruled that whilst he had adhered to previous HM Revenue & Customs guidance by spending fewer than 91 days in the UK on average each year, he had nevertheless maintained ties with the country.

Mr Gaines-Cooper may now have to pay backdated tax amounting to around £30m.

The Appeal Court said that the 91-day rule did not actually establish non-residency, and ruled that the UK had remained the 'centre of gravity' of the defendant's life and interests.

The ruling means that thousands of UK tax exiles could have their lifestyle scrutinised by the Revenue, with factors such as the number and length of visits to the UK, any economic and business ties, and other ongoing connections such as membership of UK banks or sporting clubs, being taken into consideration.

David Milne, the barrister acting for Mr Gaines-Cooper, has said that he will appeal to the Supreme Court.

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