Country of domicile
There are three main types of domicile: domicile of origin, domicile of dependence and domicile of choice. You may also be ‘deemed UK domiciled’, irrespective of your actual domicile.
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Domicile of origin
You acquire a domicile of origin at birth. This is usually the same as the domicile of your father at that time, that is, the country that your father considered to be his permanent home at the date of your birth. As a result, your domicile may not be the country where you were born.
If your parents were not married when you were born, you will take your domicile from your mother. If you are adopted, you take your domicile from your adopted father – if there is no adopted father, you take the domicile from your adopted mother.
It is very difficult to displace your domicile of origin. Indeed, your domicile of origin is retained permanently, unless it is superseded by a domicile of dependence or a domicile of choice (see the headings below). Your domicile of origin also returns if you acquire a domicile of choice which then ceases but you have not yet made a new domicile of choice.
Most migrants to the UK are likely to have a domicile of origin outside the UK, meaning that they are not domiciled in the UK (this is known colloquially as ‘non-dom’). Unless you choose to remain in the UK permanently or indefinitely, and sever ties with your original country of domicile or origin, you will probably continue to be not domiciled in the UK. However, if you were originally born in the UK or if you remain in the UK for more than 15 years, then you will be deemed to be domiciled in the UK (see below).
Domicile of dependence
Until you reach the age of 16, your domicile follows that of the person on whom you are legally dependent – if that person changes their domicile (through choice) then yours will also change.
If you were married before 1 January 1974, the wife would automatically acquire the domicile of her husband.
Domicile of choice
From the age of 16 (earlier in Scotland), an individual may be able to acquire a new domicile. This is called a domicile of choice. To acquire a domicile of choice, you must be able to demonstrate all of the following:
- You have settled permanently in the country in which you now consider yourself domiciled.
- You must intend to stay there for the rest of your life.
- Generally, you must break your ties with the country of your domicile of origin. You do not necessarily have to become a UK citizen or passport holder but these factors will be taken into account.
You will have to prove that you have chosen to live in the new country on a permanent basis and provide strong evidence of your intention to stay there permanently or indefinitely.
Factors such as your intentions (for example, where you intend to retire), your will and testament, your permanent place of residence, and your business, social and family commitments will be taken into consideration when looking at whether you have acquired a domicile of choice.
If you have a non-UK domicile of origin and you later acquire UK citizenship, then HMRC may take this as an indicator that you have acquired a UK domicile of choice. Claiming non-domiciled status after becoming a UK citizen therefore may carry a higher risk of challenge by HMRC.
In most cases it will be fairly obvious what your domicile status is, but it can be very complex in some cases. If a lot of tax is at stake, you should seek professional help.
Deemed UK domiciled
With effect from 6 April 2017, HMRC treat some individuals who are not UK domiciled as if they are domiciled in the UK for income tax and capital gains tax purposes.
This affects you if:
- you are domiciled outside the UK, but you were born in the UK with a UK domicile of origin, or
- you have been resident for tax purposes in the UK for at least 15 of the previous 20 tax years.
The effect of being UK resident in a tax year and deemed domiciled in the UK for income tax and capital gains tax purposes is that you are chargeable to UK tax on your worldwide income and gains on the arising basis in the same way as individuals who are actually UK resident and UK domiciled.
If you think this might apply to you, you should seek professional help.