In Grace v HMRC, a key residence case for airline pilots, the Court of Appeal has found that the Special Commissioner misdirected herself.

In the case of Lyle Dicker Grace v HMRC [2009] EWCA Civ 1082 a British Airways pilot claimed non-resident status. He left the UK in 1997 to set up a home in South Africa, but still visited the UK when he was piloting international long haul flights. He would then stay over in a house that he still owned in Horley. 

The Court of Appeal has now decided that the Special Commissioner, Dr Brice had misdirected herself in law when she originally heard the case, and this would have affected her decision regarding his residence.

Dr Brice originally found that the pilot was non-resident, but she took into consideration temporary residency rules and so this meant that she may have considered the fact that he had available accommodation in the UK in a different way. Her decision was overturned in the high court, and then the case went to the Court of Appeal. The case will now be remitted back to the First Tier Tax Tribunal (it cannot go back to the Special Commissioners as these have been replaced by the new tribunal system).

There is no certainty that Dr Brice's original decision will be overturned once it goes back down. Those who have relied on this ruling should wait and see; residence is not defined in the law, which means that each case must turn on its facts and it is then necessary to wade through past case law.


A new statutory residence test applies from 6 April 2013. It contains special provisions for those who work on board aircraft, ships and other vessels.