Understanding the term ‘Domicile’ by Siobhan Rattigan, Society of Will Writers

It’s technically not possible to be domiciled in the UK as the UK consists of the three legal jurisdictions: England & Wales, Northern Island and Scotland. A person domiciled in the UK can be domiciled in any one of these countries but for ease of reference we will refer to the UK.

There are four different types:

Domicile of Origin

This is the domicile acquired at birth and is usually your place of birth. A legitimate child will usually have the domicile of origin of the country in which their father was domiciled at the time of their birth. An illegitimate child, or a legitimate child born after their father’s death will have the domicile of origin of the country in which their mother was domiciled.

I.e. if you were born in England to a non-UK domiciled father, who was domiciled in America, then you would acquire an American domicile.

Domicile of Dependence

Until children reach the age of 16 their domicile will follow that of the person they are legally dependent on.

For an illegitimate child or a child whose father is dead, this is the mothers domicile. For a legitimate child or a legitimated child it is the fathers domicile.

Once a child reaches majority their domicile of dependence can be abandoned.

Domicile of Choice

From the age of 16 you may acquire a domicile of choice to replace your domicile of origin. You must settle in another country with the intention to remain permanently or indefinitely. A number of factors are considered in determining if you have acquired a domicile of choice, so you must do more than simply move to a new jurisdiction on a work or study placement for a number of years in order to acquire a domicile of choice.

Amongst other factors, the following will be considered when determining whether you can be considered domiciled in a certain country:

  • Intentions
  • Permanent residence
  • Business interests
  • Social and family interests
  • Ownership of property
  • A valid Will

Deemed Domicile

For inheritance tax purposes, a person who is not domiciled in the UK under the general law, is deemed to be domiciled in the UK if they have been:

  • Domiciled in the UK within the three years immediately before death, or
  • Resident in the UK for at least 15 out of the last 20 tax years immediately preceding the relevant tax year. (effective from 6 April 2017 once enacted, introduced by the Finance Bill (No 2) 2017, published 8 September 2017)

If a person is deemed to be domiciled in the UK, then worldwide assets will be subject to UK inheritance tax. If a person is not deemed to be domiciled in the UK, then only their UK assets will be subject to UK inheritance tax.

Domicile can be a complex area, so this short article can provide only a basic overview. Where complex advice on an individual’s domicile is required we would recommend seeking specialist advice.

 

For technical advice on the subject speak to [email protected]

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