Domicile is a significant concept in determining your exposure to tax in the UK as it will decide whether you are a resident foreign domiciliary. In Continental Europe, domicile often means the place you live or your residential address. But in the UK, the concept of domicile is the country in which you are considered to have your permanent home.
Is the UK your domicile of origin, dependency or choice? Rules have developed to determine your domicile. In broad outline, they start with your domicile of origin which is usually your father’s domicile at the time of your birth. If during the time you are legally dependant, usually during your minority, the domicile of the person you are legally dependant on changes, then your domicile of origin is displaced by a domicile of dependency. Finally, your domicile can change by acquiring a domicile of choice through the intention to remain permanently or indefinitely in a country, together with actual residence in that country either now or at some time in the past.
A domicile of origin has been described as having a strong adhesive quality and is difficult to lose in favour of a domicile of choice. With the burden of proof resting on the party alleging the change, if you came to the UK with a domicile of origin outside of the UK and have the intention of leaving the UK, you can be confident of being a resident foreign domiciliary for tax purposes in the UK. You can then consider being taxed as a remittance basis user whereby only your non-UK source income and gains to the extent remitted to the UK are taxable in the UK.
At Ritchie Phillips, we have considerable experience of negotiating an individual’s domicile status including first hand experience of dealing with the most senior officers of HM Revenue and Customs.