Grace v Revenue & Customs Commissioners

13th February 2008

Dr AN Brice; Special Commissioners; 29th January 2008

Another pilot case. The appellant was a British Airways pilot who was born in South Africa but came to live in England. He then bought a house in South Africa and set up his home there, commuting to the UK for his work. He retained his house in the UK for this purpose.

These are the facts as found by Dr Brice:

1952-1979

6. The Appellant was born on 18 May 1952 in South Africa and regards himself as domiciled in South Africa. His parents went to Kenya when he was five years old and while there they opted to become naturalised British citizens. Thus the Appellant became a naturalised British citizen while still a minor in Kenya, He still travels on a British Overseas Citizens passport which he renewed in October 1998.

7. The Appellant undertook his higher education in a boarding school in South Africa and his family moved back to Pretoria in South Africa as he was finishing school. In 1970 the Appellant started to fly aeroplanes in South Africa and qualified there as a pilot in 1971 However, he was unable to obtain employment as a pilot in South Africa. In 1974 the Appellant was married in South Africa to a United Kingdom citizen. However, there was a separation in 1978 when the Appellant’s wife retuned to the United Kingdom with their two daughters. Since that time the Appellant has had no contact with his children.

1979-1997

8. The Appellant first arrived in the United Kingdom in 1979 and obtained a United Kingdom pilot’s licence in 1980. He started working for Loganair in the same year. In 1982 that contract was terminated and he returned to South Africa.

9. In 1986 the Appellant returned to the United Kingdom and obtained a higher commercial pilot’s licence. In April 1987 he was employed as a long haul pilot by British Caledonian which was taken over in 1988 by British Airways. The long haul flights captained by the Appellant commenced from Gatwick or Heathrow Airports. In 1987 the Appellant purchased a house in Crawley which he sold in 1990 when he purchased another house in Horley. Horley is near Gatwick Airport. That house cost £250,000 and has two bedrooms and a study. It was purchased with a 100% mortgage from Alliance and Leicester. The Horley house was the Appellant’s principal residence from 1990 to 1997.

10. In 1997 the Appellant’s marriage was dissolved since when the Appellant has met his first wife on only two occasions. In the same year the Appellant planned to marry another United Kingdom resident but that did not proceed. The Appellant was then unhappy in the United Kingdom and was looking for a change of direction in his life. His parents and brother lived in Johannesburg and he wished to see more of them. He knew Cape Town well because his sister had lived there and he had friends there. He made some work trips to Cape Town and then decided that he would live there and commute to the United Kingdom for his work. He did not notify Alliance and Leicester that he was leaving the United Kingdom but he did notify the insurers of the Horley house that it was likely to be unoccupied for longer periods and paid an increased premium. He did not inform British Airways that he was no longer resident in the United Kingdom but there was no requirement that he should.

1997 – South Africa

11. On 6 August 1997 the Appellant set up home in Cape Town, South Africa while continuing his employment with British Airways. Initially he rented an apartment and then moved into a house which was transferred to him a year later. The house is in Greenways Country Estate, Strand, Cape Town and was purchased with the aid of a mortgage. It has three bedrooms. The house was acquired fully furnished although the Appellant brought from the UK a video recorder. The Appellant extended the house in 2000. It has a satellite dish and broadband internet connection. The house is near a golf course, and there is access to swimming pools, tennis courts and a beach. In evidence which I accept the Appellant said that all his neighbours lived in their homes permanently; in other words, they did not treat their homes as holiday homes. The Appellant uses the Cape Town house when he is there. He owns a BMW motor car which is kept in Cape Town.

12. The Appellant holds a private pilot’s licence in South Africa. In 2000 the Appellant became a Life Member of the Harvard Club of South Africa and flies the Club’s Harvard historic aeroplanes. In the same year he became a member of the Stellenbosch Flying Club and is still a member. He owns a Cessna aeroplane which he flies there and for which he leases hangar space. In 2002 the Appellant was a founder member of a five-member syndicate that imported a 1960 ex-RAF Jet Provost Mk 3A aeroplane to South Africa where it was delivered to Cape Town Airport. The Appellant still owns his share of the Provost and flies it. The Appellant flies his radio-controlled aircraft at the Helderberg Flyers Club in Somerset West which is not far from Cape Town.

13. In 2005 the Appellant purchased a plot of land in Somerset West and will be building a home there in September 2008. He has a well-structured social network in South Africa. He is registered with a doctor and dentist in South Africa. His parents and brother live in South Africa and he has a sister in Australia.

1997 – links with the United Kingdom

14. Since 1997 the Appellant has retained the Horley house in the United Kingdom which he uses in order to rest before or after carrying out his duties as a long haul pilot or if he has only a few days between flights. The house is fully furnished and has a computer with broadband access to the internet, a satellite dish and a dvd player. The house is not let and the Appellant retains vacant possession. He is on the Electoral Roll at Horley as a resident. Post is sent to the Appellant at the Horley address; this includes credit card statements, bank statements and correspondence with HMRC. However, the Appellant accesses his duty rosters on his computer or on his laptop. The only money recently spent on the Horley house was in 2005 for the replacement of windows and doors to improve security and to keep the property maintained.

15. The Appellant keeps a car in the United Kingdom and uses it to travel from the Horley house to work and from work to the house. The present car is six years old and has only done 33,600 miles which accounts for the journeys from his house to work and back. The Appellant has a bank account in the United Kingdom into which his salary from British Airways is paid. The Appellant is registered with a dentist in Horley but, in the entire time that he was in the United Kingdom, he only visited one dentist and that was the British Airways dentist at Gatwick whom he visited privately. The Appellant made four visits to his doctor in Horley between 1993 and 2003.

16. The Appellant has no relatives in the United Kingdom. His ex-wife and daughters live in the United Kingdom but he has had no contact with his children for over 30 years. He has only met his ex-wife twice in the last thirty years. He is a member of the professional body of the British Airline Pilots Association but is not a member of any other club or society in the United Kingdom.

17. The Appellant plans to retire when he is sixty years old and does not intend to make any visits to the United Kingdom when he retires.

Numbers of days in the UK and in South Africa were calculated, with and without days of arrival and departure, but they never exceeded 6 months in any year in the UK. Dr Bricewas referrred to Levene, Reed v Clark, Zorab, Brown, Cooper v Cadwalader, Lysaght, MacKenzie, Young, Combe and Barnet LBC v Shah, as as well sections 334 and 336 of ICTA 1988. She considered these cases and statutory provisions and concluded that the Appellant was neither resident nor ordinarily resident during the relevant period. As to the two statutory provisions she said:

“57. Thus section 336 can be contrasted with section 334. Section 334 applies where a person is resident in the United Kingdom and makes occasional visits abroad; section 336 applies where a person who is not resident in the United Kingdom comes here for occasional visits. The relevance of section 336 is that if, after September 1997, the Appellant was in the United Kingdom for some temporary purpose only and not with the intention of establishing his residence here, then he would not be treated as resident here as he did not in the aggregate spend at least six months here; the question as to whether he is here for a temporary purpose is to be decided without regard to any living accommodation he has available here.

58. In my view, leaving aside the availability of living accommodation, all the factors mentioned above point to the conclusion that after September 1997 the Appellant was in the United Kingdom for temporary and occasional purposes only. He was here in order to do his work and for no other reason. He had no intention of establishing his residence here and his intention was to establish his residence in South Africa. Thus in my view section 336 applies to the Appellant so that he is not to be treated as resident in the United Kingdom.”

She stated her conclusions as follows:

“59. I conclude that the questions whether the Appellant was resident and ordinarily resident in the United Kingdom in the years in question are matters of fact and degree. Taking into consideration all the evidence before me, and the facts I have found, especially having regard to the Appellant’s past and present habits of life, the reasons for his visits here, the temporary nature of his ties with this country, the more permanent nature of his ties with South Africa, and the distinct break made in 1997, I have come to the conclusion that from 1 September 1997 he ceased to be resident and ordinarily resident in the United Kingdom. After that date this was not where he dwelt permanently nor where he had his settled or usual abode which was in South Africa. Residence here did not have a settled purpose. I also conclude that the Appellant was not ordinarily resident here.”

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