Returning Japanese

Mr A is sole director/shareholder of UK Ltd (incorporated in England but with no UK trade) which carries on a trade as a private school from an overseas branch in Japan.

Mr A is UK domiciled and was resident and ordinarily resident in the UK from 1 July 2007 until 9 April 2011 following which he returned to Japan permanently to save his business following the earthquake tsunami and nuclear disasters in March 2011.

A substantial overdrawn director’s loan account has accumulated over the years and incremental CTA 2010 s 455 tax of £40 000 was paid on 1 April 2011.

HMRC previously accepted that UK Ltd was not resident in the UK for corporation tax purposes for the years up to 30 June 2007 when Mr A was resident in Japan.

On 31 December 2011 UK Ltd ceased trading when all assets (including the...