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Domicile rulings for UK expats

There are many thousands of British citizens that have settled overseas and intend to reside indefinitely in their country of habitual residence but who remain subject to UK Inheritance Tax on their global assets come their demise.

UK citizens that live overseas and do not intend to return to the UK should request Sovereign to obtain a professional and independent tax ruling to confirm that they are no longer UK-domiciled and that their non-UK assets should therefore not be exposed to UK IHT at 40%.

For example, Sovereign has a new client, a British born person who has lived in a continental EU Member State for more than 30 years. He and his family have no desire or intention to move to another country or return to the UK. It was ascertained that he had severed sufficient ties with the UK to lose his UK domicile but had not yet taken any steps to establish this.

An individual ‘domicile of origin’ is fixed at birth and, once an individual becomes an adult, can only be displaced by consciously adopting a ‘domicile of choice’. It is not sufficient to simply move overseas with no intention of ever returning to the UK. There must be a positive intention of remaining in the new jurisdiction permanently or indefinitely.

Sovereign obtained a written opinion within a month from a qualified UK tax professional to verify that the referenced client had acquired a domicile of choice in the country in which he had lived for over 30 years.

In addition, most of his assets were located outside of the UK and additional advice confirmed that the client was able to settle his non-UK assets into an overseas trust that would offer excluded property status for UK IHT purposes, as well as further options for tax and succession planning.

Sovereign has a high level of expertise and experience in evaluating whether UK expatriates are in a position to displace their UK domicile of origin by establishing a domicile of choice in another jurisdiction. We can obtain a professional, independent and reliable domicile ruling quickly and at a competitive fixed cost. This could create a saving of 40% in respect of UK IHT.

For further information regarding domicile, the positive application of trusts and related arrangements contact Simon Denton, MD of Sovereign UK Ltd.

Contact Simon Denton


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Sovereign Trust (Gibraltar) Limited
Tel: +350 200 76173