Statutory Residence Test: HMRC "Prevented" From Denying "Exceptional Circumstances"

In the latest round of the A Taxpayer v HMRC [2025] EWCA Civ 106 litigation, the Court of Appeal has restored the earlier decision of the First-tier Tribunal (FTT), finding that a non-UK resident taxpayer was entitled to rely on "exceptional circumstances", stemming from moral obligations to care for a sick relative and her minor children, when applying the Statutory Residence Test (SRT).

What does this mean in practice?

Three main points arise from Nugee LJ's judgment.

• The FTT has a central role not only in deciding the facts of the case but whether the facts of the case constitute "exceptional circumstances".
• Taxpayers should always be encouraged to keep detailed records of their activities in the UK since disputes with HMRC (and in particular any FTT hearing) will invariably take place many years after the fact and contemporaneous evidence will be more persuasive than the recollections of the taxpayers and other witnesses.