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Mark Higgins Rallying v HMRC

In Mark Higgins Rallying v HMRC (TC01200 – 10 June) a rally driver (H) was domiciled in the Isle of Man. In 1991 he formed a partnership with a Manx solicitor (D) to exploit his skills as a driver. In 1993 H became resident in the UK.

HMRC issued assessments charging UK income tax on the partnership income for 1998/99 to 2004/05.

The partnership appealed contending that it was wholly managed and controlled outside the UK so that H’s share of its non-UK income was only taxable on the remittance basis.

The First-tier Tribunal accepted this contention and allowed the appeal finding that ‘the high level decisions of the partnership were made outside the UK because those were determined by the views of (D) as the commercial brains of the partnership’.

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