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IHT change of domicile

It is possible in certain circumstances for an individual to have two domiciles although this is unusual. There is a concept in the UK of deemed domicile, whereby any person who has been resident in the UK for more than 15 of the previous 20 years will be deemed to be domiciled in the UK for tax purposes.

Before 6 April 2017, a person was treated as UK domiciled if they were resident in the UK for 17 of the 20 years of assessment ending with the year in which the relevant time fell. These rules are intended to prevent those with the most significant links to the UK from claiming non-dom status.

There is also a three-year rule that applies to a taxpayer who was domiciled in the UK on or after 10 December 1974 and at any time within the three calendar years before the relevant event (the death or gift). If either rule applies then, in most cases, HMRC will treat the person as domiciled (deemed domicile) within the UK for Inheritance Tax purposes.

The deemed domicile rules, or an election to be treated as domiciled in the UK, do not apply under certain limited circumstances. This includes double tax treaties and means that individuals from France, Italy, India or Pakistan cannot usually become deemed domiciles.

Source: HM Revenue & Customs | 02-08-2021

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