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F Henderson and others v HMRC

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Our pick of this week's cases

In F Henderson and others v HMRC [2017] UKFTT 556 (18 July 2017), the FTT found that the grandfather of the taxpayers had not acquired a domicile of choice in Brazil (thus relinquishing his UK domicile) so that they were UK domiciled.

The appellants were four siblings and they appealed against HMRC’s determination that they had been domiciled in the UK since their birth.

This raised a number of issues. Did their grandfather, I Henderson, acquire a domicile of choice in Brazil by the time their father, N Henderson, was born, which was not abandoned by the time their father turned 16? And if so, did their father subsequently acquire a domicile of choice in the UK?

The FTT accepted that I Henderson had been residing in Brazil at the time of the birth of his son and that, having lived there for two years, ‘he was happy living there, having recently married a Brazilian woman’. However, the FTT found that two years’ residence in Brazil was ‘too short a time for a young man (…) to form a settled intention to reside permanently there’ and that this would depend on his ability to make a living. Indeed, when his employer had asked him to move back to London, I Henderson had done so.

The FTT added that any Brazilian domicile acquired by I Henderson would have been abandoned by the time his son had turned 16 as he had acquired a property in London, left his employer, and started a UK business. Finally, even if N Henderson had a Brazilian domicile of origin, he had lost it when he had asked the family trust to purchase a property in London.

Read the decision.

Why it matters: This case sets out in detail the interaction between domicile of origin and domicile of choice and is a reminder that displacing the former is a tall order. It is also a useful reference when ascertaining the strength of an individual’s connection to a particular country for domicile purposes.

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