UT/2023/000012 - [2024] UKUT 00280 (TCC)

Mr McCabe’s background and his establishment of the Scarborough Group: §§51–59.

Mr McCabe’s living and office accommodation in Brussels, and the establishment of his Belgian service company SRE: §§60–71.

The practical arrangements for Mr McCabe’s relocation to Brussels in April 2006: §§72–78.

Mr McCabe’s Belgian tax residence: §78.

The pattern of Mr McCabe’s activities prior to 4 April 2006: §79.

Mr McCabe’s decision to relocate to Brussels, including the tax advice which he obtained in that regard: §§80–91.

Mr McCabe’s presence in the UK during the Relevant Period, including various calculations of days/part days in the UK, and nights spent in the UK and in Scarborough, and a detailed description of his travel pattern during that time: §§92–123.

Mr McCabe’s family and social relationships and activities: §§124–138.

Changes to Mr McCabe’s wealth over the Relevant Period: §§138–141.

Mr McCabe’s responsibilities for his UK businesses over the Relevant Period: §§142–157.

Although the pattern of Mr McCabe’s life over the Relevant Period had changed significantly when compared to the position before 4 April 2006, in the context of an individual who had been resident in the UK since birth those changes were not such as to constitute a significant loosening of his ties with the UK for the purpose of the residence test: §204.

The most significant factors against that conclusion were (i) the amount of time that Mr McCabe was physically present in the UK during the Relevant Period, referring to actual time spent and in the context of the number of nights and the brevity of individual visits; and (ii) the extent of his overseas activities during that time, accepting that Mr McCabe maintained a home and office in Brussels, and spent considerable time at his holiday home in La Manga, Spain (La Manga): §205.

Those contrary factors were, however, outweighed by a series of factors indicating continued UK residence. These included Mr McCabe’s ongoing business relationships in the UK, including headline roles in the business of the Scarborough Group, the time which he continued to spend with his family, the frequency of his attendance at Sheffield United matches, and the frequency and productivity of his visits to the UK for business, family and social activities: §207.

Mr McCabe therefore remained resident throughout the Relevant Period. Various specified events relied upon by Mr McCabe as contradicting that conclusion did not demonstrate a sufficient loosening of ties: §§208–210.

As Mr McCabe was resident in both the UK and in Belgium, the tie-breaker in Article 4(2) of the DTC applied: §212.

For the purposes of the first limb of Article 4(2)(a) of the DTC, it was common ground that Mr McCabe had a permanent home available to him in Brussels: §220.

Mr McCabe also had a permanent home available to him in the UK, in the form of Deepdale. Although that had been solely owned by Mrs McCabe since 2004, he was a welcome visitor there whenever he was in Scarborough, the house was available to him to use, he did use it throughout the Relevant Period. Although he did not stay there overnight, it was found that Mrs McCabe would have given him permission to do so whenever he wanted and for as long as he wanted: §§229–231.

It was therefore necessary to consider Mr McCabe’s centre of vital interests (COVI) under the second limb of Article 4(2)(a) of the DTC. Mr McCabe’s COVI remained in the UK. In particular, the FTT relied on the time spent by Mr McCabe in the UK with family and long-standing friends, his attendance at a significant number of Sheffield United matches in the UK, the fact that he was the controlling shareholder of the Scarborough Group and a director of the holding companies and key subsidiaries within the group, and conducted a substantial amount of Scarborough Group business in the UK, and the fact that all of his employment income through SRE was from UK companies in the Scarborough Group: §§237–239.

Mr McCabe therefore remained resident in the UK during the Relevant Period, and was deemed resident in the UK rather than Belgium throughout that period under Article 4 of the DTC: §249.

If, contrary to that conclusion, the FTT had found that Mr McCabe’s COVI could not be determined, or that he did not have a permanent home available to him in either State, it would have been necessary to consider where Mr McCabe had a habitual abode. The FTT’s conclusion was that Mr McCabe had a habitual abode in Belgium and not in the UK. Accordingly, if residence had not been determined in favour of the UK under the COVI test, the FTT would have found Mr McCabe to be resident in Belgium under the habitual abode test: §§246–247.