In Kevin McCabe v HMRC [2019] TC7145, the First Tier Tribunal (FTT) held that HMRC was not required to disclose documents relating to a “mutual agreement procedure” with the Belgian tax authorities. They were not sufficiently relevant to establishing his tax residency position.

Under its case management powers within the Tribunal Procedure Tax Chamber Rules 2009 (the 'FTT Rules') applied:

  • A taxpayer may apply to the tribunal to direct HMRC to provide documents, information or submissions to the Tribunal or a party which relate to any issue in the proceedings.
    • The FTT must have due regard to the overriding objective of the rules; to enable the Tribunal to deal with cases fairly and justly and in ways which are proportionate to its importance, the complexity of the issues, the anticipated costs and the resources of the parties.

Where there is an issue over an individual’s tax residency position the relevant double tax treaty provides for a Mutual Agreement Procedure (MAP) between the two tax authorities to determine the point.

  • These procedures are held behind closed doors.
  • The conclusions of a MAP are not made public and are not binding on the FTT.

Following enquiries into Mr McCabe’s self-assessment returns for the years 2006-07 and 2007-08, HMRC concluded that he was resident in the UK in those tax years and issued assessments to income and capital gains tax accordingly which were the subject of a separate appeal (the first appeal) to the FTT.

  • Mr McCabe said he was not UK resident or, if he was so resident, that he was also Belgian resident and under the UK Belgium double tax treaty tie breaker test his tax residency was solely in Belgium.
  • He applied to the Tribunal asking that they direct HMRC to disclose documents and information to him pertaining to a MAP between HMRC and the Belgian tax authorities to resolve his residency position.
  • The conclusion under the MAP was that Mr McCabe was resident in the UK for tax purposes.
  • Mr McCabe sought the documents on the basis of evidence (an email from the Belgian authorities) that the position HMRC had adopted in the MAP was significantly different from the position they were adopting in the first appeal. The MAP decision indicated, said Mr McCabe, that his centre of vital interests could not be determined and his residency was based on him being a UK citizen, whereas HMRC’s stance in the first appeal took a contradictory view concluding that his vital interests were UK centred.

The FTT refused the application:

  • the degree of relevance of the documents was low; Mr McCabe’s residence would depend largely on primary facts including where he spent his time in the relevant tax years and his intentions, and the documents sought shed no light on those primary facts.
  • It was not relevant whether HMRC were running contradictory arguments but in any event the judge did not agree that this was the case.
  • The Belgian authorities had also objected to the documents being disclosed agreeing with HMRC that confidentiality is required for the MAP to properly function. Whilst there is also a need for transparency, without confidentiality future co-operation between tax authorities might suffer, particularly since the point is echoed in the OECD manual for MAPs.

Mr McCabe had asked for the MAP to take place. He may have thought that it would assist him in determining his position with HMRC; clearly it will not but on a positive note this does leave him free to argue in the FTT that the Belgian tax authorities and HMRC are wrong and that the tie-breaker provisions of the Treaty result in him being tax resident in Belgium.


SRT: Statutory Residence Test

SRT: Statutory Residence Test Toolkit

Tax treaties & EU: where do you live?

Non-residents’ tax toolkit

External link

Kevin McCabe v HMRC [2019] TC7145