Reminder Of Common Nasty Traps On UK Domicile

A reminder of the nasty but often overlooked traps that we regularly come across.

1. The concept of domicile in the UK is slightly different from the US concept.

2. A UK domicile of origin has tenacity and is the most difficult to abandon.

   For example, assume many (who grew up in the UK to British parents) married to a Californian and acquired a domicile of choice there. If she later relocated to a different state, eg New York, with no clear intention of staying there but having made the decision to leave California she will have given up her domicile of choice in California without acquiring a new domicile of choice and her UK domicile of origin, will be resurrected and she will be domiciled in the UK for worldwide inheritance tax purposes. 3. Remember, a "deemed" domicile in the UK for inheritance tax purposes is acquired automatically by living in the UK in 17 out of 20 UK income tax years; this can therefore be as little as fifteen calendar years plus a few extra days. It is always important to do the maths and those who first moved to the UK between 6 April 1998 and 5 April 1999 are likely to find themselves deemed domiciled in the UK with effect from 6 April 2004.

4. A person who is domiciled or deemed...