Derek William Hankinson v Commissioners for Her Majesty's Revenue and Customs

Facts

Mr Derek William Hankinson was a successful businessman who had risen from electrician to managing director of Bison Limited, a manufacturer of pre-stressed concrete flooring, arranging a management buy-out in 1985 and transferring his shares to non-resident family trusts. In September 1997 those trusts sold their holdings in Bison to Phildrew Ventures Fourth Fund, a venture capital institution, while retaining an interest. He entered into a contract of employment with Monoliet Holding BV, Bison's Dutch subsidiary, to work in the Netherlands from 23 February 1998 for a minimum of 15 months, while remaining non-executive chairman of Bison, and Monoliet leased him a furnished apartment in Dordrecht. Substantial gains realised in the non-resident trusts on the sale to Phildrew were crystallised in March 1999. He fell ill on a flight to Barbados on 2 January 1999, remained there until 30 April 1999 and never returned to work in the Netherlands, retiring from Monoliet and from the Bison chairmanship in August 1999. HMRC made a discovery assessment on 24 January 2005 to income tax and capital gains tax for 1998-99 under section 29 of the Taxes Management Act 1970, followed by a statutory determination of ordinary residence dated 30 November 2006. He appealed against both.