“From 6 April 2025, the government will remove the outdated concept of domicile status and implement a new residence-based regime which is internationally competitive and focused on attracting the best talent and investment to the UK.”
It would have sufficed to say: “From 6 April 2025, the government will remove the concept of domicile status and implement a new residence-based regime.”
Though this bulletin may be read by des hommes et des femmes de la rue it is principally aimed at their agents and advisers.
I object to being propagandised and proselytised by an organisation for which I have minimal respect on behalf of another for which I have even less.
Dear Jack,
Thanks for your note. I wonder if the Government is going to change all the Estate Tax Treaties from domicile to residence, as domicile is very important under these Treaties. For families with multiple homes, residence is going to be more difficult to establish or determine than good old domicile.
What about the 183 day rule - some families keep moving about to avoid income tax problems. Where or how is their residence to be determined?
Peter Double / Probate Resealing Services.
I suspect that the SRT will apply unmodified as regards IHT Treaty provisions which use the term “domiciled” (to assign an individual to one country or the other) because that term will still be used, either in general or at least as to Treaties, despite being then based on residence. The harmonisation of the uses of the term throughout fiscal and other laws will be an operation akin to the Concordance of Ovid so it is as well that HMRC and Parliamentary Counsel have nothing else to do.
The estate duty Treaties have survived the repeal of that tax and activities of the counterparty Governments. Ireland’s treaty now applies to the CAT which is not even a transfer tax at all but a recipent’s tax. India’s is a joy for many of that heritage not yet domiciled in the UK; in that while it only applies to the charge on death India has no death duty not even domestically. So where taxing rights are ceded to India there is no tax on death in either country as long as the deceased can show he is domiciled in India according to the meaning of that term in Indian Law. Curiously HMRC do not admit even the existence of the Indian Treaty in IHTM27168-78!
“Domiciled” as to the UK in any Treaty will surely have to be conformed with the newly substituted residence-based status, if only via incorporation by reference in the new law. The Dutch Treaty uses domicile but then goes on to use residence as domicile under Dutch law; there is also a tie breaker but residence is not a component (permanent home, centre of vital interests, nationality, mutual agreement in that order).
The Indian Treaty (and Pakistan’s) apply only to “Great Britain” estate duty. The explanatory note (no statutory effect) says"The Agreement applies to the estate duty (separate from British estate duty) which is imposed in Northern Ireland". I cannot locate precisely how it is extended to the Province/The North/ Six Counties/part of the UK. I am very fond of the place but must defer to local practitioners on this. One would expect the method of doing so to be both recondite and (even if not) fiercely contested.
There are so few IHT Treaties that unilateral relief is of greater practical importance. So s159 will be available with the curiosity is subs (2): that the credit is not restricted to the UK tax payable, though HMRC doubtless interpret it that way in their delusion of being the sole authority for the purpose.
