• Domicile and how it can affect your tax

    HM Revenue & Customs (HMRC) state the following on their website:

    ‘Questions of domicile can be complex but broadly speaking you have your domicile in the country that is your ‘real’ or permanent home which, if you have left, you intend to return to’

    Domicile and Inheritance Tax

    Liability to UK inheritance tax (IHT) is dependant on an individual’s domicile. An individual who is UK domiciled or is deemed to have UK domicile is subject to IHT on their worldwide assets. However an individual who is not of UK domicile benefits from the ‘excluded property’ provisions.

    Excluded Property

    There are several categories of excluded property. The most important is likely to be property situated overseas that is owned by a non-UK domiciled individual. In this situation the excluded property would not fall into the individual’s estate for UK IHT purposes as it benefits from the ‘excluded property’ provisions.

    Therefore an individual’s potential IHT exposure will depend on their domicile status and the location of the property.

    The area of domicile and residency and how this affects your liability to UK tax is extremely complex so please get in touch to discuss this further Jason@doctorstax.co.uk

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