Your domicile, often referred to as your legal home, holds significant implications for various legal matters, including taxation, inheritance, and jurisdictional matters. While your domicile is typically determined by your place of birth or origin, it is possible to establish a domicile of choice in a different location.
This blog aims to guide you through the process of establishing a domicile of choice, empowering you to legally declare a new home that better aligns with your personal and financial circumstances.
Domicile is complicated, particularly when it comes to addressing taxation, succession or asset protection. If there is scope to acquire a non-UK domicile of choice, and especially if there is a significant amount of potential UK IHT at stake, you should always seek professional advice.
Understanding Domicile:
Domicile is a legal concept that determines your permanent home for legal purposes. It is distinct from residency or citizenship and can have far-reaching consequences. There are three types of domicile: domicile of origin, domicile of dependence, and domicile of choice. While domicile of origin is automatically acquired at birth, and domicile of dependence is acquired through a parent or guardian, establishing a domicile of choice requires a conscious and deliberate effort.
Key Factors in Establishing a Domicile of Choice:
- Intention
Intent plays a crucial role in establishing a domicile of choice. You must demonstrate a clear and genuine intention to make a new location your permanent home. This intention should be backed by concrete actions such as purchasing property, opening bank accounts, and registering to vote in the new jurisdiction.
- Residence
Physical presence in a particular location is an important factor in establishing a domicile of choice. Consistently residing in the new jurisdiction for an extended period, such as several years, indicates your commitment to making it your permanent home. It is advisable to maintain evidence of your presence, such as utility bills, rental agreements, or employment contracts.
- Ties to the New Location
Developing strong ties to the new location further strengthens your claim of establishing a domicile of choice. These ties may include involvement in local community activities, joining clubs or organizations, enrolling children in local schools, or maintaining social and professional networks in the area.
- Financial and Business Interests
Establishing financial and business connections in the new location can support your case for a domicile of choice. This may involve purchasing or investing in property, starting a business, or holding significant financial assets in the jurisdiction. It is crucial to demonstrate a genuine commitment to economic ties within the community.
- Severing Ties with Previous Domicile
To establish a domicile of choice, it is essential to sever significant ties with your previous domicile. This includes selling or renting out property, closing bank accounts, cancelling memberships, and updating relevant documents, such as your driver’s license and passport, to reflect your new domicile.
- Declarations of intention to remain permanently or to retire in a place are important, but you must bear in mind the context in which they are made and whether they are consistent with your actions. Even stating in your will that you wish to be buried in the UK or electing for UK succession law to apply over local ‘forced heirship’ rules could work against you.
Legal Advice and Documentation:
Establishing a domicile of choice is a complex legal process, and it is highly recommended to seek professional advice from a solicitor or legal expert with expertise in this area. They can provide personalized guidance based on your specific circumstances and help you navigate the legal requirements involved.
To show a change of domicile it is essential to establish an intention of remaining in the place permanently or for an unlimited time. Every event in a person’s life may be relevant. You must therefore take into account of all the evidence that can reasonably be gathered.
To solidify your claim of establishing a domicile of choice, it is crucial to maintain thorough documentation. Keep records of your actions, such as property purchases, leases, bank statements, tax returns, and any other relevant paperwork that supports your intention to make the new location your permanent home. You may want to consider an official domicile opinion to be signed off by a lawyer.
Establishing a domicile of choice is a complicated but significant step in aligning your legal home with your personal and financial circumstances.
By demonstrating a genuine intention, maintaining physical presence, establishing ties, and severing connections with your previous domicile, you could establish a new legal home.
Seeking professional legal advice and ensuring proper documentation will greatly assist you in navigating this process smoothly and in compliance with the applicable legal requirements.
Find out how we can help you
If you would like to understand more about this topic get in touch
Related posts
Published On: January 14, 2025|6.7 min read|UK inheritance Tax 2025
In 2025, individuals are taxed at a rate of 40% on any assets exceeding £325,000 – a figure known as the nil-rate band. For those leaving a family home to direct descendants, there’s an additional £175,000 allowance called the main residence nil-rate band. Combined, this means a person can pass on up to £500,000 tax-free.
Read more
Published On: July 19, 2024|2.5 min read|Understanding the Stamp Duty Surcharge for Expats: A Comprehensive Guide
Stamp Duty Land Tax (SDLT) is a critical consideration for anyone buying property in the UK, and for expats, there are additional factors to be aware of. In recent years, the UK government introduced a stamp duty surcharge specifically targeting non-resident buyers. This blog will explore what the surcharge is, who it affects, and how expats can navigate these changes.
Read more
Published On: July 12, 2024|1.9 min read|Labour Wins the 2024 UK General Election: What It Means for Your Money
The market response to Labour winning the election was pretty calm, with minimal financial market ripples. The lack of movement was unsurprising given the overall result had already been priced in.
Read more
