Commissioner of Taxation v A (2017) SC/CIV/18/16
This case concerned an appeal by the Falkland Islands’ Commissioner of Taxation to the Supreme Court of the Falkland Islands against the decision of the Tax Appeal Tribunal (‘TAT’). The underlying issue was whether A’s absence from the Falkland Islands was temporary or not, for tax purposes.
A, who had lived in the Falkland Islands for most of her adult life, had a son, C, with special medical needs who required schooling in the UK as appropriate facilities were not available in the Falkland Islands. A considered that she and her husband, B who had always lived in the Falkland Islands, needed to move to the UK whilst C attended senior school in the UK. This would take A away from the Falkland Islands for an extended period, particularly if C went on to attend university. For tax purposes, A asserted that she was only temporarily resident in the UK and maintained her ordinary residence in the Falkland Islands.
The Commissioner decided that for the relevant tax year A was not ordinarily resident in the Falkland Islands which had the consequence of A being liable for more tax. In reaching that decision, the Commissioner had particular regard to its own policy guidance which prescribed a two-year limit for the amount of time someone could spend outside of the Falkland Islands without becoming categorised as not ordinarily resident in the Falkland Islands.
A appealed the Commissioner’s decision to the TAT which decided that the Commissioner had stuck too rigidly to its own 2 year policy and had failed to consider all the relevant circumstances and, therefore, determined that the Commissioner’s decision was flawed and fell to be set aside. The TAT decided, in all the circumstances, that A should be held to be ordinarily resident in the Falkland Islands in the relevant tax year and only temporarily absent. The Commissioner appealed TAT’s decision.
The Chief Justice of the Falkland Islands dismissed the Commissioner’s appeal. He agreed with the conclusions of the TAT and held that the TAT was entitled to substitute its own decision as it did, once it had determined that the Commissioner’s original decision was flawed. The case is of interest beyond the underlying point concerning the interpretation of the Falkland Islands’ Taxes Ordinance for its discussion (i) of the law relating to statutory body guidance and fettering of discretion and (ii) the appellate jurisdiction with regard to cases involving discretionary decision making by a statutory functionary.
Counsel for A, Deans Court Chambers, Manchester
Instructed by Pauline O’Rourke,
Solicitor, Pinsent Masons LLP, Falkland Islands Office
14th June 2017