A recent Court of Appeal case shows how difficult it is for expats to prove domicile in a new country. However, with domicile being the determining factor in IHT liability, this has a major impact on tax planning
It is not often that domicile disputes reach the Court of Appeal, the second highest court in England. However, on 24 February 2006, the Court gave a judgment that will be of particular interest to those intermediaries dealing with expatriate clients. Domicile is the determining factor in inheritance tax (IHT) liability. Rules governing IHT state: Individuals domiciled in the UK are liable to IHT even on their worldwide assets. Individuals domiciled elsewhere are liable to IHT only in respect of assets situated in the UK. Everyone has a domicile of origin, which may be supplanted ...
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