Not Pflum-moxed by Remittance Basis – K O Pflum v HMRC (TC2051)

In a recent First-tier tribunal case, the taxpayer, a Swiss national, was employed in the UK and claimed he was resident but not ordinarily resident in the UK.

His salary was paid into a bank account in Guernsey, and part of the money was transferred to an Isle of Man bank account held jointly with his girlfriend.  The remainder of the funds were used in the UK.

Some of the money in the Isle of Man account was used to pay bills in the UK which was agreed as having been remitted to the UK. Further amounts were spent in the UK by his girlfriend.

HMRC had argued that all the money in the joint account should be regarded as the taxpayer’s, and therefore any sums spent in the UK should be treated as remitted.

The taxpayer argued that the account was opened in joint names to provide funds for his girlfriend as she was unable to open a bank account in her name as she was a student and not eligible to work in the UK.

The First-tier Tribunal found this explanation ‘wholly plausible’ and accepted that the account was fully controlled by the taxpayer’s girlfriend.  Therefore none of the withdrawals made by her should be regarded as remittances by the taxpayer.