Domicile Advice and Domicile Enquiries

Domicile is a very important concept for tax purposes. Unlike a number of jurisdictions, it is different to residence. In broad terms, it means where you are from rather than where you are living at a particular time. You obtain a domicile of origin when you are born. When you are born to married parents you assume the domicile of your father. Otherwise, you obtain your domicile of origin from your mother.

It is very difficult to lose this domicile of origin. Generally this only happens if you acquire a domicile of choice in a country by residing there with the intention to permanently or indefinitely remain there.

When you are resident in the UK but not domiciled here you will generally be entitled to pay income tax and capital gains tax on the remittance basis. If you are not domiciled in the UK then UK inheritance tax can apply only to UK based assets you own (or indirectly held UK residential property). This can also be relevant in relation to trusts set up outside the UK during lifetime. For these reasons, it is very important to have a clear idea as to your domicile position. It may also have a bearing on which law applies to the succession of your assets on death.

Whilst there is now a deemed domicile for tax purposes once you have resided in the UK long term, this is not the only test that applies.

HMRC now has a specific department for issuing domicile enquiries. This is targeting individuals who live in the UK but claim to be non-domiciled and individuals who have left the UK.

We are fully equipped to assist with any enquiry you receive from HMRC in respect of your domicile position.

It is also sensible to take advice on your domicile position before receiving any enquiry. We can consider your position and provide advice as to whether you ought to be considered to be domiciled in the UK or not. This is particularly important as the position is very fact orientated and it is particularly important to have evidence from you as to where you intend to live in the long-term. Unfortunately a number of these enquiries will be in relation to inheritance tax when the individual in question will no longer be around to provide this evidence. If it can be shown that the domicile position has been considered during lifetime this will be helpful.

Please contact our tax and private client team if you would like to discuss your domicile position further.