caroline c

Hoping someone on here can give me an answer, perhaps you have experience of this.

A person dies in Spain. He lives in Spain permanently and has property and other assets here.

He also has assets in England.

Why would his probate papers say he was domicile in England when he was clearly living in Spain for the last 8 or nine years of his life.

Is this a tax scam to benefit his family who live in England and is it legal to say he was domicile in England when he was not.

Loafing Along

There are two concepts here and they are quite different : Domicile v Residency :

There are considered to be two 'domicile' concepts. One is where you have your permanent home (not the same as residency, since that is where you spend your time for tax purposes). The second is your 'domicile of origin', which is where your father's permanent home was. So, you could have been born in France, but if your father was English, your domicile of origin is Britain.

Domicile and residency usually go together but for certain taxation purposes (eg income tax or inheritance tax) your particular mix of residency, ordinary residency, domicile and domicile of origin will make a difference to what tax you have to pay.
For British expats who live abroad there is also a concept of 'deemed domicile' which plays a part when calculating inheritance tax on your estate when you die. 'Deemed domicile' means that even if you are not domiciled in the UK under general law HMRC could treat you as domiciled in the UK

You need to get some good advice

Loafing Along

Inland Revenue Document :https://www.gov.uk/government/upload...remittance.pdf

Suggest you read pages 24 onwards and look at the flow chart on page 30

Pulaski

What LoafingAround said. .... It is very difficult to change your domicile, and void the impact of your domicile of origin - though it can be done. Pretty much any contact the person you mention maintains with the UK would likely mean that they maintained their domicile in the UK for tax purposes. Certainly maintaining a house would, but maintaining a bank account and returning to visit frequently likely would too.

Conversely, if someone sells all their property, closes there bank accounts, and moves all assets and investments to their new home country, severing all ties and all or most contact with their original home country, they could, possibly, acquire a "domicile of choice". Some people have gone to great trouble to escape domicile in the UK, especially in the past when death duties were very high in the UK, but they have ruined things in their final days by returning to the UK to die - proving to the satisfaction of HMRC that that had in fact remained domiciled in the UK because of their ties that drew them "home" as they faced death.

caroline c

The person lived in Spain and only had property in Spain. He had only ever been back to the UK two times in nine years.

Just wondering why the UK lawyer would say he was domicile in UK when they new he lived permanently in Spain. Just wondered if they had done it so the family in the UK don´t have to pay as much tax.

Loafing Along

Also you will need to check the Will ! Maybe the person specified he wanted UK law to take precedence , even though it is a Spanish Will

Pulaski

You'd have to ask the lawyer because the rules at the margin can be very tricky. It will be a matter for the deceased, not his heirs. Even something like asking for his ashes to be returned to the UK for scattering or burial might make a difference.

Pulaski

Did he even have a Spanish will? I could imagine that relying on a will under English or Scottish law could thwart attempts to change one's domicile.

Loafing Along

Exactly, another point in favour of the Tax man

bobd22

Could it be this person did live in Spain but under the radar and never complied with Spanish residency laws, tax declaration etc, therefore making out they were uk resident but a Spanish property owner?

Pulaski

That's another possibility - given how hard it is to change one's domicile, even minor factors will lead to the conclusion that your domicile has not changed.

scot47

It is not a simple matter of choice. You cannot simply state "I am domiciled in Utter Slobodistan". Alas, not so easy. My advice is to avoid the question of Domicile and Residency. Like the finer points of Theology it is the route to Madness.

Pulaski

It certainly isn't easy, but it isn't impossible either. ...... And why aren't you asleep?

guirijohn

Quite true, but as the deceased would not be around this is a way of communicating his thinking to the executors and the negotiating position they should adopt with the tax authorities. It would be best to seek advice if the estate is significant. If not it may not make any difference.