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UK Domicile-Australia

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UK Domicile-Australia

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Revision as of 22:52, 8 October 2011 by JAJ (Talk | contribs)
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Domicile is a legal concept that is most relevant to liability of your estate for UK Inheritance Tax.


[edit] How does it work?

  • Under England and Wales law, your domicile is the jurisdiction in which you live and intend to spend the rest of your life.
  • Scotland and Northern Ireland are separate jurisdictions for the purposes of domicile, despite being part of the same country. Scottish and Northern Irish law on domicile is broadly similar to that of England and Wales.
  • Most Commonwealth countries and the Republic of Ireland have a similar concept of domicile.
  • Under English law, no-one can have more than one domicile and no-one can be without a domicile.
  • English law views each Australian state as a separate jurisdiction for domicile purposes.
  • However, It is possible to be domiciled in one country under English law and in another country under the law of that country.
  • Domicile usually impacts issues like inheritance law and recognition of marriages. In the UK, it also impacts liability for inheritance tax.
  • Prior to 1974 (in England and Wales), married women had the same domicile as the husband.

[edit] Domicile of Origin

  • Under English law, everyone acquires a domicile of origin.
  • Usually this comes from the father. In some circumstances it comes from the mother.

[edit] Domicile of Choice

  • You acquire a domicile of choice if you establish residence in a new jurisdiction with the ability and intention to remain there permanently.
  • In this case the domicile of origin is lost and a domicile of choice acquired.
  • Children under 16 usually change domicile if the father's domicile changes. In some cases, domicile can change based on the mother (eg if parents are divorced).

[edit] Losing a Domicile of Origin

Usually, people who come to Australia from the United Kingdom wish to lose their English (or Scottish / Northern Irish) domicile in order to avoid any residual liability to Inheritance Tax.

You need a permanent visa to be able to think about switching domicile. Every case is different, but your actions should include the following:

  • become an Australian citizen as soon as eligible (IMPORTANT).
  • make your will under Australian law (IMPORTANT)
  • purchase property in Australia for your residence
  • make arrangements for your funeral to be held in Australia, or at least specify Australian burial/cremation.
  • move as many of your assets and investments to Australia as possible
  • allow your British passport to lapse once you are an Australian citizen (you can get a new one later on if you change your mind)
  • ensure that your Australian connections are, in so far as possible, with the same state in which you establish residence.
  • do not register as an overseas elector in the UK (although technically, it should be ignored if you do)
  • do not make frequent, long visits to the UK
  • do not keep a property in the UK for your own use (as opposed to a rental property, although it is better if all UK property is sold).
  • obtain a foreign driving licence to replace your UK licence

[edit] Losing a Domicile of Choice

  • Normally, you lose a domicile of choice by acquiring a subsequent domicile by the same process.
  • However you need to be careful as if you lose a domicile of choice and do not acquire a new domicile, your domicile of origin automatically reverts.