Five common mistakes UK expats make about domicile and tax
By Kirsten Hastings, 19 Jul 17
British expats still have some crucial misunderstandings about their domicile status and tax position that could leave them and their loved ones financially exposed and even land them in trouble with HM Revenue & Customs, warns Rachael Griffin, financial planning expert at Old Mutual Wealth.
OMI’s research shows 74% of UK expats who consider themselves no longer UK domiciled still hold assets in the UK, and 81% have not ruled out returning to the UK in the future.
This means HMRC is likely to still consider them to be deemed UK domiciled.
Griffin explained: “British expats are likely to have a UK domicile of origin, acquired at birth. They can try to acquire a new domicile (a domicile of choice) by settling in a new country with the intention of living there permanently.
“However, it is very difficult for someone to lose their UK domiciled status and acquire a new one.
“There are no fixed rules as to what is required to do this and the burden falls on the individual to prove they have acquired a new domicile, and often this isn’t finally decided by HMRC until someone passes away.”
She continued: “Living in another country for a long time, although an important factor, does not prove a new domicile has been acquired. Among the many conditions that HMRC list, it states that all links with the UK must be severed and they must have no intention of returning to the UK.”
Tags: CGT | Domicile | IHT | Old Mutual | Rachael Griffin
