WillsDomicile: What is it and Why is it Important?

26 November 2021by Chris Rattigan-Smith0

Under UK law a person’s domicile is broadly defined as the country in which an individual has their permanent home or is presumed to have their permanent home. It is determined using certain legal principals and it is not merely a rule of facts. It is not necessarily the same as their nationality or even the country that they are living in.

It is not possible to have more than one domicile at once.

It is important to note that whilst it is often stated that a person is domiciled in the UK, UK domicile is not technically a domicile, as the UK has different legal jurisdictions within it (England and Wales, Scotland and Northern Ireland). For ease of use, the term UK domiciled is used.

In the majority of cases, domicile should be simple to ascertain. In more complex cases, the clients may need to seek specialist advice.

Why is it Important to Consider Domicile?

If an individual is domiciled in the UK, or deemed to be domiciled in the UK, IHT is applied to all assets of that individual wherever in the world those assets are. If they are domiciled outside of the UK, IHT will only apply to assets located in the UK.

Furthermore, under UK law any movable assets owned by an individual are dealt with by the law of that individual’s domicile at death.

How is it determined?

Domicile can be acquired in three different ways.

  • Origin.
  • Dependency.
  • Choice.


Every person acquires a domicile at birth based of their parents’ domicile.

  • A child born to married parents acquires their father’s at the time of birth.
  • A child born to unmarried parents, or married parents where the father dies before birth, acquires their mother’s at the time of birth.
  • If the child is adopted, the child acquires a new domicile of origin and is treated as the legitimate child of their adopted parents, taking the father’s at the time of the adoption.

The law regarding how the child of a same sex couple acquires their domicile at birth is currently uncertain as the courts have not yet had to make a decision on this.

Domicile of origin is never extinguished but can be displaced by dependency or choice, in such a case the domicile of origin would lie dormant.


Where a child is under 16 and the domicile of the parent who their origin arises from changes, that child will acquire a new dependency based on that parent’s domicile. Once the child is over 16, they will revert to their domicile of origin.


A person can acquire a domicile of choice if they reside in a country and have the intention to reside there permanently and indefinitely.

This can also be lost if the opposite applies, i.e. if they cease residing in a country and have the intention to cease residing there permanently and indefinitely. If this is lost, an individual will revert to their domicile of origin.

Domicile of choice can be difficult to prove, particularly the intention requirement.

Deemed Domicile

Whilst a person may not be actually UK domiciled, they may be treated as being UK domiciled for IHT purposes in certain circumstances.

In the below context, the relevant time will usually refer to death, but may also be relevant in regards to lifetime transfers.

1. 15 Year Rule

Under the 15 year rule, a non-UK domiciled individual is treated as UK domiciled for IHT purposes where:

  • They have been resident in the UK for at least 15 of the last 20 tax years, ending with tax year before the relevant time; and
  • They have been resident in the UK for at least one of the four tax years ending with the tax year in the relevant time.

2. Formerly Domiciled Residents

Individuals who are non-UK domiciled and were both born in the UK and acquired UK domiciled origin are treated as UK domiciled for IHT purposes if:

  • They are UK resident for the tax year at the relevant time; and
  • They have been UK Resident for at least one of the two tax years immediately before the tax year at the relevant time.

3. Spouse Election

It is possible, in certain circumstances, for a non-UK domiciled spouse, married to a UK domiciled spouse, to elect to be treated as UK domiciled for IHT purposes.

Photo by Clay Banks on Unsplash.

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