HMRC Challenges UK Non-Domicile Claims
Updated: Mar 15
Maplebrook Services HEALTH WARNING: THIS ARTICLE WILL EITHER PUT YOU TO SLEEP OR GIVE YOU NIGHTMARES!
HMRC state in their manual that “an individual might genuinely believe he or she is domiciled in a particular territory, but objective analysis of the facts could prove that belief to be wrong. Domicile is a personal matter. During the course of any enquiry in this area personal information will have to be obtained and reviewed. The nature of such information can be extremely wide ranging, deeply personal, time consuming to provide and involve not only the individual but also family and close friends.”
HMRC have also published a four page list of information and documents they might request under HMRCRDRM23080 which gives an idea of the scope and depth of evidence that might have to be provided during an enquiry into an individual’s domicile. They state that it is important to ensure that a complete picture of an individual’s background, lifestyle and intentions is obtained.
Establishing Your Intention
Establishing your intention is a matter of fact and HMRC or UK Courts would be likely to look back at your life and attempt to infer your overall intentions. Whilst an individual would need to act as though they wanted to live overseas forever rather than simply saying it was their intention to do so, making a written statement to this effect can be persuasive.
Two of the preferred methods of doing this is firstly to include a statement, appropriately worded, within your will and secondly & MORE IMPORTANTLY by swearing an appropriately worded Affidavit. This is more formal than a simple deed and would require to be signed, stamped and witnessed before the Registrar here in Cyprus. Maplebrook Services can assist in preparing such a document. When taken together with other evidence both statements can be highly advantageous in persuading HMRC that an individual had established a non UK domicile of choice.
Domicile of Origin
Every person receives at birth a domicile of origin. A legitimate child born in the lifetime of his or her father has the father’s domicile at the time of their birth. In other circumstances the domicile of origin may be that of the mother at the time of the child’s birth.
Domicile of Choice
Domicile of choice can arise where a person takes up residence in a new jurisdiction with the intention of fixing his sole or chief residence there permanently or indefinitely. Strong evidence is required for a change of a person’s domicile of origin to that of choice and convincing steps must be taken to show a different country has become their homeland and ties with the UK have been severed. Just acquiring residency in another country does not necessarily result in a change of domicile. An individual should sell or gift UK residences or lease them out as an absolute minimum.
Reducing links with the UK is an important factor, moving investments and bank accounts to jurisdictions such as Isle of Man, Jersey or Guernsey is common practice. We at Maplebrook Services Limited have links with lawyers in all of these jurisdictions and assist in creating Wills covering assets held there.
Including in your Will reference to a Funeral Plan in place with arrangements to be buried in Cyprus also adds evidence to your long term view of your residency in Cyprus. Again, establishing a Funeral Plan is another service that Maplebrook Services are able to offer.
Just for Fun
An elderly gentleman had a serious hearing problem for a number of years. He went to the doctor and the doctor was able to have him fitted for a set of state-of-the-art digital hearing aids that allowed him to hear perfectly.
The elderly gentleman went back to the doctor after a month and the doctor said “your hearing is perfect. Your family must be delighted that you can hear again.”
The gentleman replied “Oh, I haven’t told my family yet. I just sit around and listen to their conversations. I’ve changed my will three times!”
Find out more today
Wayne Barnett FCA, MIPW, STEP Affiliate, is the Managing Director of Maplebrook Services’ Cyprus office. Maplebrook advise on and prepare UK & Cypriot Wills and Lasting Power of Attorney documents for expats and UK-based clients.
Our advisers are trained to the highest industry standards. We always meet you in person and there’s no obligation to proceed. We offer all this at a fraction of the cost of a typical high street solicitor. To make a free initial appointment, please call Wayne on 99 147650 or 26 600780.