Losing a UK domicile

Losing a UK domicile is not an easy task, and the IR would be very likely challenge your non UK domiciled status.  The classic formulation of the domicile of choice is that an individual must fix his sole or chief residence in a another country and intend to remain there for the rest of his days, unless something occurs to make him change his mind.

In terms of UK tax, non UK domicile status would be very beneficial, not least because UK inheritance tax would then only apply to any assets that you actually owned in the UK. There would also be CGT  and income tax advantages.

You would then need to build up evidence to show that you have abandoned your UK domicile of origin and have acquired a new domicile of choice.

This is something that many who leave the country do not do... with disastrous tax consequences. Frequently they return to the UK on many occasions, using the 90 days a year income tax limit. This pattern of behaviour would be likely to indicate that you have not abandoned your domicile of origin and you will be subject to UK inheritance tax on your worldwide assets.

In order to safeguard your overseas estate from Inheritance tax, you are likely to have to make some significant changes to your lifestyle in order to produce evidence that you have a new domicile of choice. This may include taking up nationality in the new country, joining new clubs/social groups, buying a burial plot, avoiding UK directorships to name only a few. For detailed advice on losing your UK domicile, please contact me.