KEY FACTORS IN DOMICILE REVIEWS
A domicile review can help you understand what your exposure to UK tax is. There are typically four types of domicile:
DOMICILE OF ORIGIN
This is awarded at birth based on the domicile of your father. If you or your family have never actively changed domicile, it is likely that you will retain your domicile of origin throughout your life.
DOMICILE OF DEPENDENCE
This domicile is awarded when your father’s domicile changes before you reach 16 years of age. Before 1974, women who married automatically acquired the domicile of their husband.
DOMICILE OF CHOICE
It’s possible to select a domicile of choice in a certain jurisdiction. If you own a home overseas and want to move there permanently, you can apply to change your domicile. Changing domicile is a very significant step and you will need to show you have removed a number of ties with your home country. For tax purposes, the onus is on you and your family to prove you have elected to move wholly and totally to another country.
A person who has been resident in the UK for 15 out of the most recent 20 years is deemed to have acquired a UK domicile for all tax purposes.
UNDERTAKING A DOMICILE REVIEW
Domicile reviews are a highly involved process and expert advice is vital. Establishing your domicile is critical to ensure that you are only paying the taxes that you need to. Undertaking a domicile review, particularly if you have complex personal and financial circumstances, can be very important for estate planning purposes.
It’s worth noting that domicile is a very ‘sticky’ status and just moving overseas or settling there may not be enough to guarantee you move outside of the UK tax net. If you have a large estate, worldwide assets and have been living overseas for some time it’s vital that you consult an expert to navigate this specialist area of tax planning.
To discuss your domicile and tax planning needs please get in touch with your nearest office.