Domicile - getting an official opinion?

sneekymum

Just talking about IHT planning with a relative and realised that in their case it would be useful to know if their deceased spouse was considered to be domiciled in the UK or not.

The deceased spouse was born abroad but worked in the UK for 40 years before buying a retirement home in their country of origin. They still had a business and property in the UK but was largely in their retirement home during their last four years.

It is critical to know whether this would remove the option to use their IHT allowance (they left everything to their spouse). The spouse returned to the UK after the death and has assets over £325K but under £650K. Is it that potentially they could have a IHT allowance of £650K, but the deceased spouse might have lost theirs by losing UK domicile?

Is there a way to bet an official opinion from the tax office in advance of my relative's death?

g6jns_2

sneekymum wrote: »

Just talking about IHT planning with a relative and realised that in their case it would be useful to know if their deceased spouse was considered to be domiciled in the UK or not.

The deceased spouse was born abroad but worked in the UK for 40 years before buying a retirement home in their country of origin. They still had a business and property in the UK but was largely in their retirement home during their last four years.

It is critical to know whether this would remove the option to use their IHT allowance (they left everything to their spouse). The spouse returned to the UK after the death and has assets over £325K but under £650K. Is it that potentially they could have a IHT allowance of £650K, but the deceased spouse might have lost theirs by losing UK domicile?

Is there a way to bet an official opinion from the tax office in advance of my relative's death?

They need the advice of an IHT specialist with specific expertise I that area. They don't come cheap but their fee is likely to be money well spent.

Beenie

The tax officw will not answer a 'hypothetical' question.

Domicile always used to be a question of fact and intention i.e. where were you born, where were your parents born and what were your ultimate intentions.

To give examples, I used to deal the tax affairs of university lecturers. One couple were originally from the US but had lived in the UK most of their careers. However, they had kept their US drivers licences, had annual eye tests in New York where they had property and always intended to return to the US on retirement, so they were classed as Non Domiciled and paid no tax on income received outside the UK.
Similarly, one guy was S.African and said he would return when apartheid had been dismantled (you can tell how long ago this was - pre Nelson Mandela days). He too was classed as Non Domiciled.

I don't know if that helps but I wouldn't have thought that an experienced tax lawyer wil charge excessively to just give an opinion on domicile.

G6JNS

sneekymum wrote: »

Just talking about IHT planning with a relative and realised that in their case it would be useful to know if their deceased spouse was considered to be domiciled in the UK or not.

The deceased spouse was born abroad but worked in the UK for 40 years before buying a retirement home in their country of origin. They still had a business and property in the UK but was largely in their retirement home during their last four years.

It is critical to know whether this would remove the option to use their IHT allowance (they left everything to their spouse). The spouse returned to the UK after the death and has assets over £325K but under £650K. Is it that potentially they could have a IHT allowance of £650K, but the deceased spouse might have lost theirs by losing UK domicile?

Is there a way to bet an official opinion from the tax office in advance of my relative's death?

There is also the question of which country the will or will were made. Not a job to do without paid for professional advice.

sneekymum

Thanks to all for your replies.

The (foreign) death certificate shows their UK address. They hadn't sold their UK house as the process of shifting over to the retirement house wasn't complete. Will and probate were on the UK gov probatesearch site and I've ordered them to see what address they show.

When the surviving spouse returned to the UK (about two years after the death) they got "Self Assessment - Statement of Account" documents sent for a few years after that from the tax office called the "Centre for Non-Residents" in Bootle. This seem to me to indicate that the tax office had them both down as having moved abroad permanently.

The surviving spouse doesn't look like they might die any time soon. they just want to be aware of their options, including whether then need to plan for/against a big IHT bill.

g6jns_2

sneekymum wrote: »

Thanks to all for your replies.

The (foreign) death certificate shows their UK address. They hadn't sold their UK house as the process of shifting over to the retirement house wasn't complete. Will and probate were on the UK gov probatesearch site and I've ordered them to see what address they show.

When the surviving spouse returned to the UK (about two years after the death) they got "Self Assessment - Statement of Account" documents sent for a few years after that from the tax office called the "Centre for Non-Residents" in Bootle. This seem to me to indicate that the tax office had them both down as having moved abroad permanently.

The surviving spouse doesn't look like they might die any time soon. they just want to be aware of their options, including whether then need to plan for/against a big IHT bill.

Residence and domicile are different things. I can only repeat she needs paid for professional advice. The cost is likely to be much less than the amount saved.