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You will generally be domiciled in the country where you consider your ‘roots’ are, or the country where you have your permanent home. Domicile is not the same as nationality, citizenship or residence.
Every individual has a domicile, which they originally acquire at birth. It is not necessarily the country that you were born in, or are currently living in. It is only possible to have one country of domicile at any given time. You can be domiciled in a different country to where you are resident.
There are three main types of domicile, explained in our page Country of domicile. These are:
- domicile of origin
- domicile of dependence
- domicile of choice
You can also have a ‘deemed domicile’ in the UK for tax purposes.
Domicile will generally not be relevant to your UK income tax liability if you are either non-resident or if you are UK resident but have no foreign income or gains.
Domicile will not usually affect how you are taxed on your employment income if you do all your work in the UK. This is because work carried out in the UK is UK-sourced income, even if it is for a non-UK employer and/or your earnings are paid overseas, and UK-sourced income is (nearly) always taxable in the UK.
However, if you are UK tax resident, have some workdays for your employer that are outside the UK and you meet the conditions for overseas workday relief during the first three years of UK residence, then you may be eligible for some relief on income relating to non-UK workdays if this income is paid and retained overseas.
Inheritance tax (IHT) is charged on the value of a person’s estate on death. In some cases it also applies to assets transferred during that person’s lifetime. Your domicile affects the scope of IHT. UK-domiciled individuals are chargeable to IHT on worldwide assets, but non-UK domiciled individuals are only chargeable to IHT on UK assets. IHT may also be payable on transfers of assets to a non-domiciled spouse or civil partner in certain circumstances.
An individual may be deemed to have a UK domicile for IHT purposes in circumstances where they may not be deemed to have a UK domicile for income tax and capital gains tax purposes. For example, an individual will be deemed to be UK domiciled for IHT purposes if they were UK domiciled at any point within the three years immediately preceding death (or asset transfer).
Telling HMRC your domicile status
As with residence, there is no formal requirement to agree your domicile status with HMRC.
However, if you are someone who is required to submit a tax return, you will need to complete the SA109 ‘Residence, remittance basis etc.’ supplementary pages if your domicile status is relevant to the entries on your tax return (for example, if you are claiming the remittance basis and have left out your foreign income and gains on the basis that they have not been remitted). This is then subject to potential enquiry by HMRC if they wish to challenge the position you have taken.
Note that it is not currently possible to file the SA109 pages online using HMRC’s own filing portal. You will therefore need to file on paper (before an earlier deadline) or using commercial software. Alternatively, you can engage a tax adviser to file the return on your behalf.
If there is any question over your domicile status, a court can make a formal ruling on your domicile.
There is more information on domicile on GOV.UK.