| 17/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 2/71 |
Decided: 21 May, 1971 |
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Incentive to new residents - interpretation of the words "residence" and "ordinary residence" - articles 5 and 10, now 4 and 14, Income Tax Act
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Appellant claimed that he was entitled to a special allowance of GBP500 and 6d rate of tax which had been introduced by Government as an incentive to attract new residents to the Island. The Commissioner refused to grant him this concession since he considered appellant to be "ordinarily resident in Malta".
The Board observed that while the parties agreed on the facts, different interpretation was being given to the wording of the law. Both in Malta's and the United Kingdom's Income Tax Acts there was no definition of the words "residence" and "ordinary residence" and their derivatives. It, therefore, had to rely on case law in reaching its decision.
In the case Cachia vs Magistrate Dr F Mizzi, the Court of Appeal had held that the word "residence" was not a technical word with a specific meaning. When a word is not defined in the particular legislation its meaning may vary according to circumstances and the context in which it is used. The Court cited analogous cases among which A.G. vs Coote: "it is no uncommon thing for a gentleman to have two permanent residences at the same time, in either of which he may establish his abode at any period and for any length of time" and Pittar v Richardson: "it may well be that a man is ordinarily resident in Great Britain and is at the same time ordinarily resident in the Dominions abroad".
Regarding the term "ordinarily resident" it is noted in Simon's "Taxes" that "The term 'ordinarily resident' has, like the word 'resident', no technical or special meaning for the purpose of the Tax Acts. The expression 'ordinarily resident' must, however, bear a narrower meaning than the term 'resident' ... the cases show that the test of time or duration is an important one but by no means conclusive. The regular course of a person's life is an equally important element to be taken into account even though the time element may be insignificant. ... there was a preponderance of opinion that the adverb 'ordinarily' did narrow the meaning of the word 'resident' and this view seems the more sound. ..."
Case law shows that the true converse of ordinarily resident is occasionally resident and that residence which is habitual and part of the regular order of a man's life is ordinary. On the other hand a man need not necessarily spend the majority of his time, nor have his principal residence in the country in order to be "ordinarily resident" there.
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