In Evert Henkes v HMRC [2020] TC7645, the First Tier Tribunal (FTT) found it had jurisdiction to determine a person’s domicile status before it decided if closure notices (CNs) must be issued or information notices (INs) were valid; Mr Henkes was UK domiciled, the INs were valid and HMRC had reasonable grounds not to issue CNs.

If you are non-UK domiciled (non-dom) there are tax advantages compared to a UK domiciled individual.

Schedule 36 FA 2008 allows HMRC to make a written request (an information notice) to a taxpayer to provide information or produce a document provided that:

A taxpayer under enquiry may apply under s.28A TMA 1970 for a full or partial closure notice and the Tribunal must grant this unless it is satisfied there are reasonable grounds for not issuing a notice.

Mr Henkes, who was born in Venezuela, considered himself non-UK domiciled and claimed the remittance basis for 2014/15 and 2015/16. HMRC had confirmed non-domicile status in 1984.

The judge considered the case of Executors of Mrs R W Levy as the facts in the two cases were very similar but came to a different conclusion to the Tribunal then which decided the FTT did not have the power to determine the question of domicile at this stage in the enquiry process. He also considered Embiricos v HMRC [2019] TC07083, which has been appealed to the Upper Tribunal (UT) where the FTT found that, unlike with a final closure notice, HMRC can issue a partial closure notice (PCN) which does not quantify the amount of tax due.

There was some question whether, if the Tribunal did determine the domicile point here, the parties could simply ignore that decision on appeal. The judge concluded that the doctrine of issue estoppel would prevent this.

On the question of jurisdiction, he concluded:

On the question of Mr Henkes' domicile the judge decided:

On the closure notice point and appeal against the information notices:

The judge concluded by pointing out that there was no right of appeal against his decision that the information notices were reasonably required. Mr Henkes can appeal in respect of the closure notices but this would have to be considered in the light of there being valid outstanding information notices.

Links to subscriber guides

Non-domicile status, deemed domicile & tax
Who is non-UK domiciled? What does this mean for UK Income Tax, Capital Gains Tax and Inheritance Tax? What reliefs are available to non-doms?

Remittance basis (overseas income)
What is the remittance basis? Who can claim it and when? What are the advantages of claiming the remittance basis and how much is the remittance basis charge?

Closure Notices
When does HMRC issue a closure notice? Can a taxpayer demand one? Are there appeal rights? 

Schedule 36 Notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

How to appeal an HMRC decision
What type of decision can you appeal? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External link

Evert Henkes v HMRC [2020] TC7645