The Upper Tribunal of the United Kingdom's Tax and Chancery Court considered an appeal on 8 February 2011 in the matter of Dr. Andreas Tuczka against Her Majesty's Revenue and Customs Commissioners.

The Revenue sought a determination that Dr. Tuczka was ordinarily resident in the United Kingdom in the period from 1998 to 2001. He grew up and was educated in Vienna. In 1997 he was offered employment by SBC Warburgs in London and he commenced working there. He asked his girlfriend, Sylvia who later became his wife, to join him in London once she had finished her studies. When he initially moved to London he rented accommodation. In February 1998 he contracted to buy a property in Notting Hill.

By that stage Sylvia had graduated and she came to join him in London. She started a temporary accountancy contract with Price Waterhouse Coopers.

In July 1998 Dr. Tuczka estimated his stay for Her Majesty's Revenue at two and a half years. He and Sylvia were married in Austria on the 10th of May 2001. They planned to return to Vienna and in August 2001 they purchased a home in Vienna to serve as their matrimonial home. In May 2002 he left Warburgs intending to return to Vienna. However, while he was on gardening leave he accepted an offer from ABNAMRO to continue working in London under an arrangement which enabled him to spend part of his working week in Vienna.

Sylvia in August 2002 took up a post with PWC in Austria and moved to the matrimonial home.

The case seemed to turn on a consideration of the House of Lords decision in Shah v Barnett Local Borough Council. The case did not involve tax statutes but the obligation on local education authorities to pay student grants under the Education Acts. The case is cited in Honiball and Olivier on International Tax, 4th edition at page 61.

The court said that it was common ground between the parties that the principles and reasoning of Shah would apply in the present case. Critically, Lord Scarman expressly rejected the contention that ordinary residence requires an intention to live in a place permanently or indefinitely.

The court then looked at the judgment of Lord Slynn of Hadley in the case of Nessa v Chief Adjudication Officer. That case considered the meaning of the expression "habitually resident". Dr. Tuczka submitted that even if ordinary residence did not require an intention to reside in the United Kingdom for an indefinite period, an intention to reside in the United Kingdom for only two and a half years was too short to constitute a "settled purpose". In the first tribunal, the judgement said that the "settled purpose" arose during 1998 - 1999.

The couple had set up home in London in the spring of 1998 and their employment commitments kept them in London. Dr. Tuczka's purpose was to continue his employment while it lasted. They quoted Lord Scarman in Shah to the effect that "a person's abode in a particular country which he or she has adopted voluntarily as part of the regular order of his life for the time being, whether of short or long duration."

The court did not find the purchase of the Notting Hill flat determinative. They saw his employment and the way he adopted a pattern of living which continued until 2002 as the important issue. Dr. Tuczka's appeal was dismissed as the Tribunal held him to be ordinarily resident in the United Kingdom in the period from 1998 to 2001.

Written by Alastair Morphet, Tax Director, Cliffe Dekker Hofmeyr