Understanding Domicile – Death, Marriage & Taxes

The legal concept of domicile is often confused with nationality, citizenship or residence however it is a complex area of law which must be considered when dealing with your personal affairs.

It is what the courts use to determine which legal system applies to you if you have connections with more than one jurisdiction.  Once determined, it is then relevant to matters such as wills and succession on death, taxation, marriage and divorce.

This article covers the general aspects of domicile however it should be noted that establishing a person’s domicile is dependent on the intricate details of that individual and so seeking legal advice on the subject if you are in doubt is imperative.

Domicile can be acquired in one of three ways:

  • Domicile of origin
  • Domicile of dependency
  • Domicile of choice

We all have a domicile of origin at birth and it is based on the domicile of your parents.  In most circumstances you would acquire your father’s domicile however if your parents were unmarried at the time you were born, then your domicile of origin will be the same as your mother’s.

Domicile of origin can never be lost but there are ways in which it can be displaced if you acquire a domicile of dependency or a domicile of choice. It is important to note that your domicile of origin can be revived at any point if the domicile of dependency or choice is lost. Displacing domicile of origin is very difficult to do and the onus is on you to prove otherwise.

The first way in which your domicile of origin can be displaced applies to persons who are dependent on another. The dependent person has the domicile of the person on whom he or she is dependent. Unsurprisingly, unmarried children under the age of 16 are classified as dependants; as well as mentally disordered persons.

An example of Domicile

Mary was born in Florida in the United States to a father who was domiciled in the UK when she was born.  Before she was born, Mary’s parents had moved to the US for work but had always intended to return to the UK, therefore Mary has a UK domicile of origin.

If Mary’s parents decided to make Florida their permanent home, their domiciles of origin would be displaced, and instead they would have a domicile of choice in the US, meaning that Mary would acquire a domicile of dependency in the US also.

The second way in which you can displace your domicile of origin is by acquiring a domicile of choice.  In order to show that you have a domicile of choice elsewhere you must first off be residing in that country.

Secondly, you must be able to show an intention to reside in the new country permanently and indefinitely.  Both of these elements must be present at the same time.

The term residence for domicile purposes means that you must be actually living in the new country rather than just having a casual presence. Regular visits to the new country would not be sufficient to displace your domicile of origin.

Different factors are taken into account to establish whether you are truly living in the new country which would include examining the location of your assets, family, belongings and business interests.

Perhaps considered a more objective test, you must intend to reside in the new country permanently and indefinitely, and provide strong evidence of that intention.

How you prove this intention can be difficult but there are certain factors that are routinely taken into account when painting the picture of your domicile:

  • The purchase or renting of a house in the new country
  • Marrying a national of the new country
  • The presence of your spouse and children in the new country, as well as where your children are educated
  • Where your business interests and/or other investments and assets are held
  • The desire to be buried in the new country
  • Membership of clubs and learning the local language

It is important to note that it is not the length of the residence that is of great significance, but the quality of the residence and so a key point in establishing domicile is record keeping.  A clear and contemporaneous record of your intentions is extremely useful to support a claim for a change of domicile.

Graeme Black
Partner, Private Wealth & Inheritance
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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