In I Strachan v HMRC [2023] UKFTT 617 (TC) (5 July) the FTT held that although the taxpayer had failed to establish a domicile of choice in Massachusetts having taken all relevant factors into consideration HMRC had failed to discharge the burden of proving that there had been a loss of tax because of carelessness.
Mr Strachan completed tax returns for the five years to 2015/16 on the basis of a domicile of choice in Massachusetts. HMRC disagreed and raised discovery assessments and closure notices. With just over £420 000 tax at stake the FTT had to decide the issue of domicile and extended time limits for carelessness. If the tax loss was not due to carelessness two years fell out of assessment.
For the taxpayer it was argued on the basis of Barlow Clowes International Ltd v Henwood [2008] EWCA Civ 577 that a domicile...
