Dating an election for deemed domicile

Trusts Discussion
1

I have an estate where the deceased is domiciled in England and his French wife is electing to be deemed domiciled. I understand this needs to be dated prior to her husband’s death by up to 7 years. She then has to be not resident in the United Kingdom for the purposes of income tax for a period of four successive tax years beginning at any time after the election is made, the election ceases to have effect at the end of that period.

Prior to his death she was not an English resident tax payer. He was, despite living in France because of his pensions and he had a rental property in England. The estate goes into a life interest trust for her. She is registered as a French tax payer.

How should we date the election for residency for it to apply and will she be resident for UK income tax purposes? We don’t believe she has made gifts in the past 7 years.

2

Not necessarily.

Re an election either Condition A or Condition B must be satisfied.

Under Condition A during the seven year period ending on the date of the election the spouse electing must have had a spouse who was domiciled in the UK.

Under Condition B within seven years ending with the date of death the deceased was domiciled in the UK.

Condition A is referred to as the lifetime election and Condition B the death election.

Hence under Condition A an election may be made before or after the spouse has died.

Residence for income tax purposes will be determined under the SRT.

Malcolm Finney