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Supreme Court rules in non dom’s favour in landmark US/UK DTR case

In a landmark decision on the tax status of a non-dom taxpayer, the Supreme Court has ruled in favour of Mr Anson, a former private equity partner, who remitted income from a Delaware limited liability company (LLC) in US to the UK stating that he is entitled to double taxation relief (DTR), overturning earlier decisions on the issue at the Upper Tribunal (UT) and Court of Appeal

 

The case [Anson v Commissioners for Her Majesty’s Revenue and Customs, [2015] UKSC 44; on appeal from [2013] EWCA Civ 63] concerned a seven-year period from 6 April 1997 to 5 April 2004, during which Anson was a member of a Delaware LCC, which is classified as a partnership for US tax purposes.

As such, Anson was liable to US federal and state taxes on his share of the profits. Anson remitted the balance to the UK and was liable to UK income tax on the amounts remitted, as ‘income arising from possessions outside the UK’, subject to any DTR which might be available.

HMRC decided that Anson was not entitled to any DTR on the basis that the income that had been taxed in the US was not his income, but that of the LLC.

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