DEEMED DOMICILE - anomaly ??

Nov 16, 2003 3 Replies

Inland revenue leaflet IHT18 states:



For inheritance tax purposes, there is a concept of deemed domicile. Even if you are not domiciled in the UK under general law we will treat you as domiciledin the UK at the time of a transfer if you were domiciled in the UK within the three years immediately before the transfer, or you were resident in the UK in at least 17 of the 20 income tax years of assessment ending with the year in which you make a transfer.



The literature implies that the first test is applied to a UK-domiciled person leaving these shores, and the second is applied to a foreign-domiciled person coming to live here. Can someone tell me if in fact



*both* these tests apply to a UK expat.

The above rules are enshrined in S 267 (1) Inheritance Tax Act 1984 and, as far as I am aware, there is no case law upon them..

Both rules are drawn sufficiently broadly to cover a UK expat.

John Pointon Accountant, Tax Consultant "In business to grow your business"

I am trying to model the complex interaction between this rule, the 183-day rule, the 91-day rule, and the 4-year average 91-day rule.

Suppose a person emigrates during tax-year 2003-4. Will he be considered in the following tax year as having 19 "legacy" resident tax years, decreasing by one in each subsequent tax year?

Precisely,

John Pointon Accountant, Tax Consultant "In business to grow your business"

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