A recent tax case that caught our eye involved the great-grandson of the chairman of the diamond mining company, De Beers. The case saw Jonathan Oppenheimer win his dispute with HMRC over his tax residence.

The First-Tier Tribunal (FTT) ruled Mr Oppenheimer was ‘treaty resident’ in South Africa despite his long-term residence and business interests in the UK.

Who is Jonathan Oppenheimer?

Mr Oppenheimer is the great-grandson of Sir Ernest Oppenheimer, who controlled De Beers and founded the mining company Anglo American Corporation of South Africa.

Born in Johannesburg, Mr Oppenheimer is a South African businessman who has permanent homes in both the UK and South Africa.

Background to the tax dispute

Following an enquiry into Mr Oppenheimer’s tax affairs, HMRC raised closure notices and discovery assessments based on funds he received from the family trust in the tax years from 2010 to 2017.

The total of the remittance payments in this period is more than £20million and the additional tax is more than £10million.

HMRC based its argument on its view that Mr Oppenheimer was ‘treaty resident’ in the UK from 2 April 2010 to 5 April 2017.

But Mr Oppenheimer appealed HMRC’s decision, which led to the dispute being heard by the FTT.

The case: Jonathan Oppenheimer v HMRC [2022] TC08443

Mr Oppenheimer argued the ‘taxing right’ in his case belonged to South Africa.

Double taxation agreements between countries require ‘tiebreaker’ tests to determine a person’s tax residence.

Both parties agreed Mr Oppenheimer has permanent homes in both the UK and South Africa. So, the next task was to determine his ‘centre of vital interests’.

The tribunal found that throughout the relevant period Mr Oppenheimer’s personal and economic relations were closer to South Africa rather than the UK.

The FTT also decided Mr Oppenheimer had a habitual abode in South Africa. And because he is a national of that country, the answer to the tiebreaker is: he is treaty resident in South Africa.

For all these reasons, Mr Oppenheimer succeeded in his appeal.

Our thoughts on the tax dispute

This is an interesting case with significant amounts of tax at stake.

Treaty residence can be a complex and grey area. While each case will turn on its own facts, disputes such as Jonathan Oppenheimer v HMRC give us an idea of where some of the lines are drawn when applying the tiebreaker rules.

At Churchill Taxation, our team of tax specialists are experienced at dealing with HMRC enquiries and investigations on behalf of our clients.

We also offer a tax expert witness service for solicitors and forensic accountants.

To find out more, call us on 07813 434195 or email stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation