The ruling by the Special Commissioners has caught many tax experts by surprise, by upholding an interpretation of tax residency rules by HM Revenue & Customs which runs counter to the tax department's own guidelines.

The case in question involves businessman Robert Gaines-Cooper, a British-born multi-millionaire businessman based in the Seychelles, who has claimed not to be resident in the UK for tax purposes.

Under UK tax law, a person is treated as non-resident for tax purposes provided that they spend no more than 90 days in the country. This allows wealthy business owners to live in low-tax jurisdictions such as Monaco and Switzerland but jet into the UK for one day per week to do business.

However, in the eyes of the Revenue, Gaines-Cooper could not be considered non-domiciled because he maintained strong links with the UK, for example, by schooling his son in the country, among other factors.

However, it would also appear that HMRC is now taking a more stringent approach to how it defines time spent in the UK. For example, the common practice of flying into the UK on a Monday, working on a Tuesday and flying out on a Wednesday was usually assumed to count as one day spent in the country. But according to HMRC's new position, the individual is effectively spending two days in the UK.

The accounting profession is urging non-domiciled Britons currently claiming tax residency elsewhere to review their situation.

"The bottom line is that accountants advising people who spend certain amounts of time in the UK and want to avoid being regarded as tax resident here are going to have to reassess the parameters they use," Maurice Fitzpatrick, a senior tax manager with Grant Thornton, was quoted as saying by the Financial Times.

Reports suggest that Gaines-Cooper will appeal the decision to the High Court, although a hearing might not materialise for about a year.