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Domicile Reviews

Your domicile plays a crucial role in determining your exposure to UK tax, particularly when it comes to Inheritance Tax (IHT) under the current rules. For example, if you have been abroad for an extended period, maintaining UK domicile means you will be liable to pay IHT on your worldwide assets. 

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Key Factors and the Importance of Domicile Reviews

A domicile review can provide valuable insights into your UK tax exposure. There are generally four types of domicile to consider: 

  1. DOMICILE OR ORIGIN  
    Awarded at birth based on your father's domicile. If there have been no active changes to your domicile, it is likely to remain throughout your life

  2. DOMICILE OF DEPENDENCE
    Awarded when your father's domicile changes before you turn 16 years old. Prior to 1974, women automatically acquired the domicile of their husbands upon their marriage.

  3. DOMICILE OF CHOICE
    It is possible to select a domicile of choice in a specific jurisdiction. if you own a home overseas and intend to permanently move there, you can apply to change your domicile. This process requires demonstrating the severance of ties with your home country. The responsibility lies with you and your family to prove your complete relocation to another country for tax purposes. 

  4. DEEMED DOMICILE
    if you have been a UK resident for 15 out of the most recent 20 years, you are considered to have acquired a UK domicile. 

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Conducting a domicile review is complex and we will be able to assist you on providing expert advise on this.  Establishing our domicile is crucial to ensure you pay only the necessary taxes. Particularly for estate planning purposes, a domicile review will be important if you have intricate personal and financial circumstances. 

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Simply moving or settling overseas may not guarantee exemption from UK tax. If you possess a substantial estate, worldwide assets and have lived abroad for a long period of time, consulting an expert in this area is vital to ensure that all avenues to plan for the future is analysed.

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To discuss your domicile and tax planning requirements, please do not hesitate to reach out to us for further information. 

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