Brussels IV Declaration Altering Domicile?

One of our introducers in Cyprus has been approached by one of Cyprus’ biggest IFA firms with a query - if someone who is domiciled in Cyprus for tax purposes makes a Will to cover his UK assets, does putting a Brussels IV clause in the UK affect his “tax status”? The IFA firm seems to think it does but in my view, Brussels IV is about an election of succession law to apply to a UK Will and does not impact on the individual’s tax status.

Paul Hutchinson
Hutchinson Legal & Associates Limited

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Malcolm Finney

Do you mean an option for the law of his nationality, being British (Intra UK)? Is this a Cypriot law will? You might need two wills here, if available under Cypriot law, which I take to be the law of the testator’s habitual residence.

From the UK perspective, the point has already been aired on the forum. Provided the testator maintains his Cypriot domicile, a question of fact, if of choice, then an option for the law of his nationality should not operate to render him domiciled in the UK on the basis of the clause alone. However, you can’t answer the question in the abstract if the Cypriot domicile is a domicile of choice subject to a spectrum of facts pointing in either direction. Were it a domicile of origin the issue would be different. HMRC’s attitude has hardened on this issue and they will insist on evidence and a full factual history to hack up a Cypriot domicile of choice. If the Origin was in the UK, then the testator has to get rid of any UK residences either by gifting them or leasing them out as a minimum. A certain David Camidge has been heading up the HMRC’s international team’s revised policy. Quite what IFAs are doing fiddling around with this concept eludes me. Presumably they want to have advice without incurring legal fees? If so I am concerned for the client.

Peter Harris