Domicile was the Key Legal Concept in UK Tax Law

Domicile was the key legal concept in UK tax law from 2008.

From April 2025 UK tax legal system is based on UK residence rules.

Domicile remains the cornerstone legal concept in UK's tax law, which applies to most UK tax legislation up to April 2025 and continues to relevant for the overseas non-UK trusts settled before April 2025.

What is Domicile and Non-Doms under English Law?

Domicile is a distinctive legal concept under English law. Effectively, it means the place of your origin and your permanent home. 

Therefore, if you are currently living in the UK, but originally are from overseas, the idea is that you are temporary in the UK and you have not acquired your British domicile.

A number of UK tax rules were updated in 2008, to allow a special tax treatment for individuals whose permanent home is not in the UK. These individuals are called non-doms, in short. 

They continue to be non-domiciled in the UK even if they have been long-term residents in the UK. They are popularly known as non-dom res (non-domiciled residents).

The Three Types of Domicile under English Law

There are three types of domicile under English law.

Domicile of origin.

Domicile of origin is acquired at birth. The purpose of this domicile is to attach a person to a particular legal system.

Domicile of dependence.

Domicile of dependence applies to children. It also applied to married women until 1 January 1974. Domicile of dependence also applies to persons suffering from a mental disorder.

Domicile of dependence is attached to the father or the husband, historically, in the case of married women.

Therefore, the child (the minor) will always have the father’s domicile if the child was born in a marriage.

Illegitimate children acquire the domicile of their mother. Adopted children acquire the domicile of their adoptive parents.

Overseas nationals are able to pass on their overseas domicile to their children even if they are born in the UK and acquire British citizenship by birth.

Therefore, it is completely unnecessary to frustrate the process of acquiring British citizenship for children born in the UK to parents who are resident or not resident in the UK, but continue to be domiciled overseas.

Domicile of choice.

Domicile of choice suggests that an individual of sound mind and adult age is capable of changing their domicile of origin. There are a number of different factors that may come into play when deciding the domicile of choice.

However, the domicile of choice is only relevant to persons of British (England, Wales, Northern Ireland and Scotland) domicile to shake off their British domicile for UK tax purposes, namely, Inheritance tax.

It will suffice to say that English courts are not very receptive to this line of reasoning and a number of different requirements will need to be met to successfully claim the change of English domicile and avoid UK Inheritance tax on worldwide assets.

Why Knowing What Domicile is Still Important for You Today? 

Even though, UK implemented residence based system from April 2025, the understanding of domicile remains important.

Domicile is still relevant for UK tax regime from 2008 to 2025 and is still applied for overseas non-resident trusts settled prior to April 2025.

HMRC actively encourages you to document and maintain your UK tax domicile and residence status with your UK tax advisor.

Consult the Expert

Book a call with me to discuss your Global Wealth Strategy, including your global assets and how UK tax applies to your circumstances.

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Saule Voluckyte, M.A.E.S, LL.B, FAIA

I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.

Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.

Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.