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  • Writer's pictureWayne Barnett FCA | MIPW | STEP Affiliate

UK Domicile

Updated: Mar 15, 2023

Domicile is a uniquely British concept not often used or understood in European or Civil law countries, although it has been ‘exported’ to most Commonwealth countries, including Cyprus.

A person’s domicile is essentially the place they regard as home. When born, a person acquires a ‘Domicile of Origin’, usually the place they were born or the domicile of their parents.

Domicile of Choice

A ‘Domicile of Choice’ can be obtained when a person abandons their Domicile of Origin and chooses some other place as their permanent residence and does in fact reside there. As a person can never not have a domicile should they abandon a Domicile of Choice (for example, by leaving with no intention of returning), their Domicile of Origin will revert. A client of ours was astounded to learn from us that having left the UK at the age of 10, living in South Africa for 60 years before coming to Cyprus a year ago having never visited the UK in the intervening period, that he would still be classified as UK domiciled.

The significance of the above is that the person would be liable to UK Inheritance Tax (IHT) on his worldwide assets. An individual who was classified as non-UK domiciled would only be liable to IHT on assets in the UK at time of passing away - i.e. property, shares and bank accounts in excess of the various exemption thresholds. Consider moving any such excess to, say, the Channel Islands or Isle of Man.

UK Domicile may remain, even if you live abroad

Living in Cyprus for many years does not necessarily mean that you are not UK domiciled, even if a person is deemed Cypriot-domiciled by Cyprus. HMRC in the UK are not interested in Cyprus’ view of an individual, only their own.

By maintaining too many links with the UK, such as owning residential property, substantial savings and investment connections, membership of organisations, wishing to be buried in the family plot in England, frequent visits ‘back home’ etc. are all potential evidence to HMRC that a person has not relinquished UK domicile.

Bear in mind, that an HMRC Domicile status enquiry will only commence after a person has passed away and is no longer in a position to defend their claim to being non- domiciled – that is left to the Executors who may not have sufficient information and explanations to defend such a claim.

Scottish Domicile

This is worthy, and will be the subject of a separate article in its own right, but just to highlight that Scotland has its own rules as to who is entitled to inherit from an estate. We have seen Cypriot Wills drawn up by Cypriot Lawyers who assumed, wrongly, that such individuals were free to distribute their Estate in whichever way they wished.

For further guidance and advice, please contact Wayne Barnett & his team by emailing, calling 26 600780, or completing the contact form below.


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