Can I Reverse the Position?

As Alfie mentions, assuming that an individual does not have a UK domicile of choice, they will acquire a domicile of choice in the UK if (i) they reside in the UK (ii) with the intention of remaining here “permanently and indefinitely”.

Whether an individual satisfies the second limb of the test can be hard to establish. Broadly speaking, an individual will have the necessary intention to remain in the UK permanently and indefinitely if they have decided to spend the rest of their life (or until “the end of their days”) here, even if they do not consider the decision to be irrevocable.

It is critical that the individual is able to point to a contingency on the occurrence of which they will leave the UK. The important point to note is that the contingency upon which they will leave the UK must be “clearly foreseen and reasonably anticipated”. This might include, for example, intending to leave the UK after a specific period of UK employment or upon retirement. The contingency must not be “only a vague possibility” and it must not be too indefinite. In one case, the judge commented that an individual intending to return home “if I make a fortune” or “when I've had enough of it” would not be a certain enough contingency. Similarly, it has been stated that “some sentiment about dying in the land of his fathers” would be insufficient.

In the event of a challenge by HMRC, the courts will look at a multitude of factors in addition to citizenship, including:

1. social and family interests;
2. membership of clubs;
3. ownership of property;
4. exercising of political rights;
5. business interests;
6. desire to be buried in the country of domicile; and
7. visiting the country of domicile on a regular basis,

so failing to naturalise as a British citizen will not in itself prevent an individual being considered as acquiring a UK domicile of choice if, on balance, the other factors point towards an intention to remain in the UK for the rest of their life.

In addition to having a significant impact on an individual’s inheritance tax exposure and ability to access the remittance basis of taxation, acquiring a UK domicile of choice can have a significant impact on the taxation of any trusts settled by the individual prior to becoming domicile and, as also succession rights.

In the event that an individual does become UK domiciled, they will only lose this domicile if they both (i) cease residence in the UK and (ii) intend to cease residence here permanently and indefinitely. Both of these elements are required to lose an acquired UK domicile, so if an individual forms the requisite to intention to remain in the UK indefinitely and permanently, they cannot lose their UK domicile without leaving the UK. It is also worth pointing out that the UK’s tax legislation has provisions that treat a person as UK domiciled for tax purposes for some time after they have left the UK (known as a “tax-tail”).

For more information or advice, please contact John FitzGerald, Senior Associate in our Private Client team.

Senior Executives: thinking of relocating to the UK?

When the employee has relocated to the UK and employment has started

• I assume I can't get naturalised as a British citizen and obtain a passport if I want to remain non-domiciled?
• I am being offered Crypto tokens as an incentive by my employer. How will I be taxed?
• I've bought a UK property, as my job will keep me here for 5 years or more. I have put a Will in place as my conveyancer suggested to deal with the house. It covers all my assets, including my assets in France, where I remain domiciled.
• Once I become UK resident, can I avail myself of the remittance basis in respect of any income or gains arising on my cryptoassets?
• I have old US stock options granted 2 years ago by my then US employer over shares in the US top company of the group granted when my duties were solely in the US. I am now employed by the wholly owned UK subsidiary: do I pay UK taxes on vesting?

Please do contact any member of our Sen Ex Advisory Group to suggest a question or to find out more about how we can help.

Non-dom rules to be replaced with four-year temporary residence regime

The Chancellor of the Exchequer, Jeremy Hunt, has announced that the government will abolish the current tax regime for individuals who are UK resident but not UK domiciled in favour of a residency-based system, which will apply from 6 April 2025.

Senior Executives: thinking of relocating to the UK?

We answer common questions raised at key stages of the relocation process.