A Guide To The UK's Domicile Regime

• Law Firm: Withers LLP
• Subject Matter: Tax, Tax Authorities
• Author: Hannah Wailoo and Georgina Hamilton
• Published date: 18 May 2023

In recent months, "non-doms" have returned to the political spotlight, with the Labour Party confirming that, if elected to power, they would abolish (or at the very least markedly change) the regime.

Over the coming weeks, we will be publishing a series of articles exploring the "non-dom" regime in the UK, how it might be changed as a result of potential political change and what alternatives there are to it across the world. In this first piece, we set out the essential elements of the current system.

The benefits of the regime have been curtailed by legislation passed by previous administrations, most notably in the Finance Act 2008 and again by the Finance (No2) Act 2017, however it is still utilised by many people who come to live in the UK from abroad.

In light of media and political attention being given to the topic, Georgina Hamilton and Hannah Wailoo provide a brief summary of the regime and the key terminology involved.

What is domicile?

The concept of a person's domicile is different to that of a person's nationality or place of residence. A person is generally domiciled in the jurisdiction which is their 'permanent home'. This may or may not be the country where they live full time, or the country/ies of which they are a national.

Under English law, everyone acquires a 'domicile of origin' at birth, although over time the jurisdiction in which a person is domiciled may change, if they either acquire a new 'domicile of dependency' or a 'domicile of choice'. A person's domicile is not always straightforward to determine, especially for those who spend much of their lives living and working in different places throughout the world.

For UK tax purposes, there is also an additional category known as 'deemed domicile' which applies to people who are long term resident in the UK but who do not adopt a domicile of choice here.

The categories of domicile are briefly summarised as follows:

Domicile of Origin - This is determined by the domicile of a person's father at the time of that person's birth, provided that the person is legitimate and born during their father's lifetime. A person who was illegitimate at birth (even if later 'legitimated' by their parents' subsequent marriage) or who was legitimate but born after their father's death, will have a domicile of origin determined by the domicile of their mother at the time of his birth.

Domicile of Dependency - If the domicile of a legitimate or legitimated child's father changes before the child...