A Court of Appeal decision confirms that serious family obligations may, in limited cases, amount to “exceptional circumstances” under the UK Statutory Residence Test. Vectigalis Tax explains what this means for internationally mobile individuals.
UK Tax Residence and Exceptional Circumstances: When Family Emergencies May Matter
For internationally mobile individuals, the UK tax residence rules can appear deceptively simple: count your days, check your UK ties, and apply the Statutory Residence Test.
In practice, matters are rarely that straightforward.
A recent Court of Appeal decision, A Taxpayer v HMRC [2025] EWCA Civ 106, provides important guidance on when days spent in the UK may be disregarded because of “exceptional circumstances”. The case is particularly relevant for individuals with cross-border lives: entrepreneurs, executives, internationally mobile families, UK/Italy taxpayers, HNWIs and individuals who spend time between the UK and another jurisdiction.
The decision should not be read as giving taxpayers a general escape route from the UK residence rules. It does, however, show that the Statutory Residence Test must be applied to real human circumstances, not only to a spreadsheet of travel dates.
The basic issue: why UK tax residence matters
UK tax residence is fundamental. If an individual is UK tax resident, they may be taxable in the UK on a much wider basis than a non-resident individual.
This has become even more important following the abolition of the previous remittance basis regime and the introduction of the new UK foreign income and gains framework. For individuals with non-UK income, offshore assets, family wealth, business interests, trusts or investment structures, a residence mistake can have significant UK tax consequences.
The Statutory Residence Test, often referred to as the SRT, is the UK’s statutory framework for determining whether an individual is UK tax resident in a particular tax year. It looks at a combination of UK days, previous UK residence, UK ties, family, accommodation, work and other connecting factors.
In many cases, the number of days spent in the UK is decisive.
What happened in A Taxpayer v HMRC?
The taxpayer had moved to Ireland and claimed to be non-UK resident for the 2015/16 UK tax year. During that year she received a substantial dividend. If she was UK resident, the dividend was potentially within the UK tax net; if she was non-UK resident, the position was materially different. The Court of Appeal recorded that, under the relevant SRT rules, she would be UK resident if she spent more than 45 days in the UK during that tax year. She was present in the UK at the end of 50 days.
The taxpayer argued that six of those days should be disregarded because they were spent in the UK due to exceptional circumstances involving her twin sister, who was suffering from alcoholism, suicidal tendencies and serious difficulty caring for her children.
HMRC disagreed. HMRC’s position was that the circumstances did not qualify as exceptional circumstances and did not “prevent” the taxpayer from leaving the UK. HMRC issued a closure notice amending her tax return to include the dividend.
The First-tier Tribunal originally found in favour of the taxpayer. The Upper Tribunal then found in favour of HMRC. The Court of Appeal restored the First-tier Tribunal’s decision and allowed the taxpayer’s appeal.
The exceptional circumstances rule
Under the SRT, a day is normally counted as a UK day if the individual is present in the UK at the end of that day. However, there is an exception where the individual would not have been present in the UK at the end of the day but for exceptional circumstances beyond their control which prevented them from leaving the UK, provided the individual intended to leave as soon as those circumstances permitted. The legislation also limits this relief to a maximum of 60 days in a tax year.
The legislation gives examples such as war, civil unrest, natural disasters and sudden or life-threatening illness or injury. These examples are important, but they are not necessarily exhaustive.
The key question in A Taxpayer v HMRC was whether serious family and moral obligations could, in principle, amount to exceptional circumstances that prevented the taxpayer from leaving the UK.
What did the Court of Appeal decide?
The Court of Appeal accepted that moral obligations or obligations of conscience can, in the right circumstances, be relevant. The Court did not say that every family difficulty, emotional obligation or personal inconvenience will qualify. That would be too broad.
The more careful point is this: a taxpayer is not limited to cases where they are physically unable to leave the UK or legally prohibited from leaving. There may be exceptional cases where the facts are so serious that a moral or family obligation effectively prevents the taxpayer from leaving.
That is a significant clarification.
The Court of Appeal also emphasised that these cases are highly fact-sensitive. Whether circumstances are “exceptional” is primarily a question for the fact-finding tribunal. This means evidence is critical. Contemporaneous documents, travel records, medical evidence, communications, family circumstances and the precise reasons why the individual remained in the UK may all matter.
What this does not mean
This case should be approached with caution.
It does not mean that taxpayers can ignore UK day limits because of ordinary family commitments. It does not mean that HMRC will accept exceptional circumstances claims lightly. It does not mean that a taxpayer can rely on vague recollections after the event.
The practical lesson is narrower but important: where a genuinely serious and unexpected event arises, and where the individual can show that they were effectively prevented from leaving the UK, an exceptional circumstances argument may be available.
That argument must be evidenced carefully.
Why this matters for internationally mobile individuals
The case is especially relevant for individuals who live across borders, including those with connections between the UK and Italy, Ireland, Switzerland, the UAE or other jurisdictions.
In practice, residence problems often arise where an individual:
- moves abroad but keeps family or accommodation in the UK;
- spends time in the UK for work, family or medical reasons;
- receives significant dividends, bonuses, carried interest or capital gains;
- assumes that non-UK residence is secure without testing the SRT in detail;
- underestimates the importance of UK ties;
- fails to retain proper evidence of travel and the reasons for being in the UK.
The risk is that a person may believe they are non-UK resident, only for HMRC to challenge that position years later.
A practical example
Consider an individual who has moved from the UK to Italy and intends to remain non-UK resident. They continue to visit the UK to see family, attend meetings and deal with personal matters. During the year, a close relative suffers a serious medical or mental health crisis, and the individual remains in the UK for longer than planned.
The question is not simply whether the individual had a good reason to stay. The real questions are more precise:
Was the event genuinely exceptional? Was it beyond the individual’s control? Did it prevent them from leaving the UK? Did they intend to leave as soon as the circumstances permitted? Can they prove this with evidence?
That is where proper tax advice becomes essential.
The evidence point: day counting is not enough
One of the most important messages from the case is evidential.
International individuals should not rely only on calendar entries or flight confirmations. Those are useful, but they may not explain why the individual was in the UK, why they remained there, or why they could not leave earlier.
A robust residence file may include:
- travel records;
- boarding passes and passport data;
- diary entries;
- medical correspondence where relevant;
- contemporaneous emails and messages;
- evidence of family emergency;
- records showing when the exceptional circumstances began and ended;
- evidence that the taxpayer left the UK as soon as reasonably possible.
This is particularly important because HMRC enquiries often arise years after the relevant tax year. By then, memory may be imperfect and documents may be harder to obtain.
The wider 2026 context: residence is becoming more important
Although A Taxpayer v HMRC was decided in 2025, its practical relevance is likely to continue growing.
The UK has moved away from the historic remittance basis regime. As a result, determining whether an individual is UK resident, non-UK resident, or potentially treaty resident elsewhere is now even more important for internationally mobile individuals.
For many clients, the central question is no longer simply “Can I keep foreign income offshore?” The question is increasingly: “Am I UK tax resident at all, and can that position be defended?”
That is a materially different risk profile.
Key takeaway
A Taxpayer v HMRC is not a licence to treat UK residence limits casually. It is a reminder that tax residence is both technical and factual.
For internationally mobile individuals, the correct approach is to plan proactively, monitor UK days carefully, preserve evidence, and review the position before significant income or gains arise.
In cross-border tax, the problem is often not only the rule itself. It is whether the taxpayer can prove, several years later, what actually happened and why.
How Vectigalis Tax can help
Vectigalis Tax advises internationally mobile individuals, entrepreneurs, executives and families on UK and cross-border tax residence issues, including UK/Italy matters, Statutory Residence Test reviews, pre-arrival and departure planning, residence risk assessments, and HMRC-defendable tax positions.
If you are spending time between the UK and another country, or if you are unsure whether your UK day count could create a UK tax exposure, it is sensible to review the position before the issue becomes an HMRC enquiry.
For an initial discussion, please contact:
Case reference
The key case is A Taxpayer v HMRC [2025] EWCA Civ 106, Court of Appeal, judgment dated 13 February 2025. The judgment confirms that the appeal concerned the taxpayer’s UK residence status for 2015/16 and the application of the exceptional circumstances provision under the Statutory Residence Test. Link: https://www.taxchambers.com/wp-content/uploads/2025/02/A-Taxpayer-v-HMRC-final-.pdf