Tribunal allows taxpayer's appeal as although he had failed to establish his domicile of choice HMRC had failed to prove there had been a loss of tax due to his carelessness

13 September 2023. Published by Keziah Mastin, Associate

In Strachan v HMRC [2023] UKFTT 617 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against assessments, despite a finding that he had been careless as HMRC had not discharged the burden of proving that the loss of tax was bought about by his carelessness.


Ian Charles Strachan completed his tax returns for tax years 2011/12 to 2015/16, on the basis that he was domiciled in Massachusetts. HMRC considered that at the relevant time he was domiciled in England. HMRC therefore issued assessments for those years.

Mr Strachan appealed to the FTT.

FTT decision

The appeal was allowed in relation to 2011/12 and 2012/13 and refused in relation to 2013/14 through to 2015/16. 

The issues in the appeal were:

1) whether Mr Strachan had a domicile of origin in England or in Scotland;
2) whether from 1987 to 2006, he had a domicile of choice in Connecticut;
3) whether from 2006 (and in particular for the relevant years) he had a domicile of choice in Massachusetts; and
4) if the answer to the last question was no, whether Mr Strachan had been 'careless' when he completed his 2011/12 and 2012/13 SA tax returns, and if so, whether the carelessness had brought about the loss of tax, so as to allow HMRC to issue discovery assessments for those two years.

The FTT decided that Mr Strachan had an English domicile of origin (where he was born) and had never had a domicile of choice in Connecticut.

The FTT's decision in relation to issue (3) turned on the meaning of 'chief residence' in the context of the relevant case law. The FTT reiterated that all relevant factors have to be considered and the fact of having a home in a place and an intention to end your days there is not sufficient.

In relation to issue (4), Mr Strachan had not taken any professional advice on his domicile status since 1987 and the FTT found that he had been careless in completing his tax returns as there had been significant changes to his position since that time. However, HMRC had the burden of proving that Mr Strachan's carelessness had brought about the loss of tax and the FTT concluded that HMRC had not discharged that burden. HMRC had not been able to show that had Mr Strachan taken advice before filing his earlier returns, that advice would have supported HMRC's position on domicile.

As a result, Mr Strachan's appeal was allowed in relation to discovery assessments relating to 2011/12 and 2012/13.


This case provides a detailed discussion of the case law surrounding 'domicile of choice', which will be useful to anyone considering this important area of the law. 

The FTT's decision that the burden of proof in relation to extended time limits for the purpose of discovery assessments is on HMRC, will be very disappointing to HMRC as the FTT confirmed that the burden does not shift to the taxpayer once HMRC has proved carelessness. This issue may be the subject of further litigation in due course.

The decision can be viewed here.

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