In Jonathan Oppenheimer v HMRC  TC08443, the First Tier Tribunal (FTT) ruled that a non-UK domiciled individual was ‘treaty resident’ in South Africa despite long term residence and business interests in UK. As a result £20m of funds transferred to the UK were not ‘remittances’ and as such not subject to UK tax.
– Oppenheimer (taxpayer) had received £20 million from a family trust; HMRC believed he was a treaty resident within the UK at the time he had received the payments – if so, tax on these payments would have accumulated to over £10 million, however, if he was deemed treaty resident in South Africa, there would be no additional tax due.
– Oppenheimer who had personal and economic connections with both South Africa and the UK.
– Oppenheimer was found to be a treaty resident in South Africa due to the tiebreaker test in the UK/South Africa Double Tax Treaty.
The Appeal was made under Article 4(2) (the ‘tiebreaker’ test) of the double taxation relief, it was found that:-
- South Africa was the state of his ‘centre of vital interests’, in which his personal and economic affairs were closer.
- Despite the decision on centre of vital interests being sufficient to allow the taxpayer’s appeal, the FTT went on to consider that the appellant had a habitual abode in RSA.
The appeal was accepted on both grounds.
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