Your Domicile and your Residency can play an important part in estate planning, such as when you have income or gains from outside the UK.
Domicile is a general law concept; it refers to the country, which is your permanent home. There are a range of factors that can affect where you are domiciled at any point in your life.
You are domiciled if you meet the following conditions:
- If you are in the UK for 183 days or more in a tax year, you are resident for that year for tax purposes
- If you come to the UK to live for two years or more, you are resident from the date of arrival
- You are also likely to be a UK resident if you come to the UK regularly each year and are in the UK for an average of 91 days or more in a tax year – usually worked out over a maximum of four consecutive tax years
- If you’re resident in the UK year after year you will normally be ordinarily resident
- You’re ordinarily resident in the UK from the date you arrive if it’s clear that you intend to stay for at least three years
If you are UK domiciled you are liable for UK inheritance tax (IHT) no matter where you reside. And as a resident or even non-resident, you will be liable for IHT on UK sited assets.
To find out more about your domicile and how this affects your Estate Planning please talk to a qualified Holborn Assets adviser.