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As most tax planners will know citizenship is not the same as domicile. Also citizenship has little if any tax implications. Domicile is primarily determined under general law although there is a deeming provision for IHT. In the recent case concerning Mr Mohammed Bheekhun the taxpayer had a domicile of origin in Mauritius but came to the UK to live and work in 1960 aged 29. He acquired UK citizenship.

The Court of Appeal upheld his separated spouse&#39s contention that he died domiciled in the UK. Accordingly she was able to claim from his estate under the Inheritance (Provision for Family and Dependants) Act 1975.


If someone decides to live permanently or indefinitely in the UK, that is sufficient to determine domicile. That decision can be inferred from the facts rather than any claim by the individual or other parties.

Whilst dual residence is entirely possible, for the purposes of the laws of the countries comprised in the United Kingdom an individual can have only one domicile at any one time for any one country. This does not prevent two countries claiming at the same time that he was domiciled in their country eg. the UK and France could both claim that an individual was domiciled in their country but under UK general law an individual would either be domiciled or non-domiciled in the UK at a particular time. For an individual to lose his UK domicile he would have to acquire a domicile in another country ie. it would not be sufficient for him to merely leave the UK as a tax exile and spend time travelling around the world eg. with homes in France, Spain, Switzerland, Monaco and Florida etc but with no permanent intention to reside in another country. If, however, England (for example) was not the individual`s domicile of origin, but domicile of choice then when departing the UK his domicile would revert to the country of origin in the absence of any new domicile of choice being established.

The issues of citizenship and domicile are however sometimes confused. It is sometimes incorrectly assumed that because an individual applies for and is granted UK citizenship and is thus entitled to apply for and use a UK passport, that individual automatically becomes domiciled in the UK and so is liable to the full range of UK taxes. This is not so, although the taking of UK citizenship and the use of a UK passport may be two relevant points out of several relevant points to be considered.

As a planning point establishment of a trust with non UK sited property whilst the settlor was non UK domiciled would ensure that the trust property would be excluded property and whilst non UK sited, would be outside of the IHT net. It is also worth noting that for a non domicilliary any UK policy should be issued under seal so that it can be excluded from IHT provided that it is sited (physically) outside of the UK.


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