Scottish Court of Session Decisions

The Income-Tax Act 1842, section 39, enacts—“Any subject of Her Majesty whose ordinary residence shall have been in Great Britain” (now the United Kingdom—Income-Tax Act 1853, sec. 5), “and who shall have departed from Great Britain and gone into any parts beyond the seas, for the purpose only of occasional residence, at the time of the execution of this Act, shall be deemed, notwithstanding such temporary absence, a person chargeable to the duties granted by this Act as a person actually residing in Great Britain.… Provided always that no person who shall on or after the passing of this Act actually be in Great Britain for some temporary purpose only, and not with any view or intent of establishing his residence therein, and who shall not actually have resided in Great Britain at one time or several times for a period equal in the whole to six months in any one year, shall be charged with the said duties mentioned in Schedule D as a person residing in Great Britain in respect of the profits or gains received from or out of any possessions in *(Ireland or) any other of Her Majesty's dominions or any foreign possessions or from securities in * (Ireland or) any other of Her Majesty's dominions or foreign securities, but nevertheless every such person shall, after such residence in Great Britain, for such space of time as aforesaid, be chargeable to the said duties for the year commencing on the sixth day of April preceding. [*Words in brackets repealed by 37 and 38 Vict. c. 96.]”

The Income-Tax Act 1853, section 2, enacts that the duty charged under Schedule D of the Acts is payable “for and in respect of the annual profits or gains arising or accruing to any person residing in the United Kingdom, from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in the United Kingdom or elsewhere.”

In November 1903 Stewart Robertson Turnbull, merchant, Madras, appealed to the Commissioners of Income-Tax for the county of Edinburgh against an assessment

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of £720 for the year ended 5th April 1903 made upon him under Schedule D of the Income-Tax Acts, in respect of profits received in the United Kingdom from foreign possessions. The ground of his appeal was that he was not a “person residing in the United Kingdom.”

On 28th June 1904 the Commissioners refused the appeal, and on the application of the appellant stated a case for the opinion of the Court,

The case set forth:—“1. The following facts were admitted or proved—( a) The appellant is a subject of His Majesty. He has carried on business for forty years as a merchant in Madras, where, besides his business premises, he has a residence, in which he usually resides. His wife has for a number of years resided with their children in the United Kingdom, and the appellant has latterly visited them for a shorter or longer period nearly every year. ( b) The appellant was not in the United Kingdom in the year ending 5th April 1899. He visited and resided in it for in all more than six months in the year ending 5th April 1900, for three and a-half months in the year ending 5th April 1901, and for eight months in the year ending 5th April 1902. Accompanied by his wife and eldest daughter he left this country for India on 30th December 1901, and was not again in the United Kingdom until June 1903, when, along with his wife, he took up his abode at No. 2 Corrennie Gardens, Edinburgh, where since the year 1900 he has usually resided when in the United Kingdom, ( c) For a number of years prior to Whitsunday 1900 the appellant's wife rented furnished houses in this country, in which she and the children resided, but in that year she purchased a dwelling-house, known as No. 2 Corrennie Gardens, Edinburgh, the money being provided partly by the appellant and partly by his wife. The conveyance to the house was taken to the appellant's wife and her heirs and assignees. In the valuation roll of the city of Edinburgh for the year 1902-3 Mrs Turnbull is entered as owner and occupier of the house. ( d) The appellant and his wife were not in the United Kingdom at any time during the year of assessment, that is, the year ending 5th April 1903, but during the whole of that year the children, except the eldest daughter, and the servants, in charge of a lady superintendent, who also lived in the house, occupied the house at No. 2 Corrennie Gardens, Edinburgh. ( e) The amount received in the United Kingdom from the profits of the business in Madras for defraying the cost of his household expenses and the education of his children in this country was estimated to be £720, on an average of three years preceding the 5th April 1902.… 5. The appellant contended that he was not resident in the United Kingdom during the year of assessment according to the legal construction of the Income-Tax Acts, his only residence being in Madras, where his business is, and where he actually lived during the whole year of assessment, and that the residence of his children in Edinburgh was not in the circumstances his residence; and further, that in the years in which he came to this country it was only for a temporary purpose, and not with the intention of establishing any residence here for himself, and that therefore he came under the scope of exemption contained in the proviso to section 39 of 5 and 6 Vict. c. 35. Alternatively, in the event of its being held that he had a constructive residence in this country prior to the year of assessment, then the appellant contends that he departed from Great Britain and beyond the seas for the purpose of resuming his permanent residence, and remained abroad during the whole year of assessment. 6. In support of the assessment the Surveyor of Taxes (Mr Francis Foster) contended that in the circumstances set forth the appellant had and maintained a residence in the United Kingdom during the year of assessment, and must be deemed to be a person residing in the United Kingdom within the meaning of the Income-Tax Acts, and as such liable to the assessment, and further that the exemption referred to by the appellant did not apply, being limited in its terms to any person who shall be in Great Britain for a temporary purpose only, and not with any view or intent of establishing his residence therein, whereas the appellant established a residence in the United Kingdom: in 1900, in which he has personally resided from time to time as suited his convenience, and which was occupied by his family and servants during the year of assessment. In support of his contention the Surveyor referred to Lloyd v. Sulley, 1884, 11 R. 687, 21 S.L.R. 482, 2 Tax Cases 37.”

Argued for the appellant—The appellant had not been in the United Kingdom at any time during the year of assessment. The case of Lloyd v. Solicitor of Inland Revenue, March 12, 1884, 11 R. 687, 21 S.L.R. 482, did not support the view that having a residence for his children in the United Kingdom for their education was residence on the part of the appellant; that case proceeded on the fact that Lloyd had a residence and had resided in the United Kingdom.

Argued for the respondent—The appellant's residence in the United Kingdom was of the same character as that which he had in Madras; both were places where he “usually resided.” The Commissioners had rightly held the appellant to he within the Act— Attorney-General v. Coote, 1817, 4 Price 183; he did not cease to have residence in the United Kingdom merely by reason of absence during the entire fiscal year in question— Rogers v. Solicitor of Inland Revenue, June 28, 1879, 6 R. 1109, 16 S.L.R. 682; Lloyd v. Solicitor of Inland Revenue, cit. sup.