INTRODUCTION

The world has opened up again, and new opportunities and challenges are emerging as a result.

One such opportunity is the chance to travel the world and meet valued friends and contacts. In that spirit, a team from MTG came to Geneva and Zurich in May 2023 to host presentations and discussions around the general theme of moving to the UK.

The topic of global mobility is firmly back under the spotlight. The desire to have freedom of movement, and being able to invest freely around the world, brings with it a range of technical questions. Beyond that, the underlying political climate is (at the time of writing) highly fractious in various parts of the globe. The possibility for legal systems to change dramatically, and with little warning, always needs to be borne firmly in mind.

We hope that the summary of the key topics we discussed during our trip is useful. As always, if you have any questions in relation to any of the issues raised below, please do not hesitate to contact any of the authors, or your usual contact at MTG.

DOMICILE

Domicile is an incredibly important concept in English law.

Despite its huge importance, the rules and principles are notoriously vague. It is a very unusual test, particularly given the huge impact it can have on a person's UK legal and tax status.

Unlike residence (which is a physical test of where someone lives) domicile is a much more amorphous concept. A person's domicile depends on a mixture of their personal history, and their present and future intentions.

The rules are complex, but to give an example of their seemingly arbitrary effect: two twins could lead similar lives, moving to the same countries and dying together in the same country: and still have different domiciles.

The impact of an English domicile is hugely significant in a number of legal areas.

  • It can completely change the basis on which someone is subject to UK tax.
  • It can have an impact on other matters, such as divorce; and the laws that apply to the succession to a person's estate.

Where a person has any sort of historic or present connection to the UK, a cautious view on domicile should be taken unless they are as certain as they can be that they are non-UK domiciled.

There is now a "15 year" test for "deemed" domicile for certain tax purposes – but take care:

  • It should not be assumed that a non-UK person who has been resident for fewer than 15 years is definitely non-UK domiciled. They might well be domiciled much before the 15 year test is met.
  • Even after the 15 year test to be deemed domiciled is satisfied, it is often extremely important to be able to sure that the "common" law test of domicile is not met – i.e., that the person does not intend to stay in the UK permanently or indefinitely.

Domicile statements – while sometimes viewed as self-serving – are very useful tools to critically assess someone's domicile, and to use as a yardstick to ensure that future patterns of behaviour are consistent with the stated domicile.

Domicile has been a politically sensitive subject for a number of years, and the rules should be kept under review. There are a number of different ways in which they could potentially change.

The non-domiciliary status and favourable tax regime are political "hot topics".

Sir Keir Starmer (leader of the Labour opposition party) in a radio interview in May 2023 voiced his intention to abolish non-domiciliary tax status.

With an election looming (to occur by January 2025 at the latest), what will happen to the regime and whether there will be any grandfathering to protect existing arrangements remains to be seen.

We recommend keeping in touch with your UK advisors to keep your fingers on the pulse and help clients to organise or consider their affairs in light of any proposed amendments.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.