A typo on google search about the ‘Royal berth’ prompted me to ponder the breadth of the statutory residence test. Could life on the ocean wave solve problems for the uber wealthy who wish to side-step or conclusively acquire UK statutory residence?
A typo on google search about the ‘Royal berth’ prompted me to ponder the breadth of the statutory residence test. Could life on the ocean wave solve problems for the uber wealthy who wish to side-step or conclusively acquire UK statutory residence?
The ‘home’ is the corner stone of the test, and it is clear, the concept is not confined to land lubbers. As we know: ‘A home can be a building (or part of a building), a vehicle, vessel or structure of any kind which is used as a home by an individual. It will be somewhere which an individual uses with a sufficient degree of permanence or stability to count as a home.’
Anyone who has visited the Royal Yacht Britannia, now berthed in Edinburgh, will know that she is described as ‘this most special of Royal residences’ and ‘home to Her Majesty The Queen and the Royal Family’ (accompanied by a quotation from HRH that ‘This is where I can truly relax.’)
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You could definitely easily conclude that HRH would have regarded the Royal Yacht Britannia as a ‘home’ – and while she is no longer travelling as extensively as she used to, its by no means a given that she would have satisfied the automatic residence test. After all, there are the long hours working abroad on Royal Tours, and so many houses in which to stay in the UK, but let’s not go there.
The Royal Yacht Britannia
Royal berths/births aside, Roman Abramovich parked his 557 foot, $1.5billion super yacht Eclipse in New York’s West Docks awaiting the birth of his daughter Leah Lou because he doesn’t have a ‘home’ in New York – other than, of course, Eclipse. I am assuming that the bigger the yacht, the more stable it is in rough seas and one would hope that when spending that amount of money on a boat/home that ‘over’seas is a given. But who is to say whether the haves and the have yachts might not start to compete with super submarines next?
Needless to say, whether or not a floating home can help or affect its owner’s tax residence position, any members of his or her crew will be treated differently. There are special provisions in the legislation for those with jobs on board vehicles, aircraft or ships. Neither the third automatic UK test nor the third automatic overseas test will apply to those who make at least six cross-border trips in the year that either begin or end in the UK. This means that they cannot be UK resident on the grounds that they work full-time in the UK and that they cannot be non-UK resident on the grounds that they work full time overseas.
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What is clear at least is that you can’t be ‘domiciled’ on your yacht – you need association with territory for that and unless your super yacht runs aground no matter how much you intend to spend the rest of your days in the lap of luxury aboard (akin the residents of “The World” perhaps?), it cannot be your domicile of choice – from a legal perspective at least!
However, for UK tax residence at least (other countries have differing rules), living on board your super yacht may provide you with a ‘home overseas’ in which you spend more than 30 days in any tax year, to counteract the 30 days or more you may spend in your UK home and take you outside the the ambit of the conclusive UK tax residence test.
Sophie Mazzier is Counsel at private wealth City law firm Maurice Turnor Gardner LLP
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