RDRM20040 - Domicile: Introduction and Background: 'Deemed domicile' for Inheritance Tax purposes
From 6 April 2025, the concept of domicile as a relevant
connecting factor in the tax system has been replaced by a system based on tax
residence. This guidance remains for reference purposes only.
This section is included as background. For detailed information about 바카라 사이트˜deemed domicile바카라 사이트™ and Inheritance Tax in general you should refer to the Inheritance Tax Manual.Ìý
From 6 April 2025, for inheritance tax purposes, domicile is replaced by long-term UK residence and you can find details of these rules at IHTM47000.Ìý
Deemed DomicileÌý
It is possible for an individual to be 바카라 사이트˜deemed바카라 사이트™ to be domiciled in the UK for the purposes of Inheritance Tax only, while being domiciled at common law in a territory outside the UK. The rules are different depending on when the relevant time falls.ÌýÌý
Relevant time prior to 6 April 2017ÌýÌý
Deemed domicile in the UK can arise in two ways.Ìý
Section 267(1)(a) IHTA 1984 provides for the 바카라 사이트˜3-year바카라 사이트™ rule. This applies where the individual was domiciled in the UK on or after 10 December 1974Ìýand at any time within the three calendar years before the relevant event.Ìý
Section 267(1)(b) IHTA 1984 is the basis of the 바카라 사이트˜17 out of 20-year바카라 사이트™ rule. For the rule to apply the individual must have been resident, for Income Tax purposes, in the UK on or after 10 December 1974 and in not less than seventeen out of the twenty years of assessment ending with the one in which the relevant event falls.Ìý
Relevant time from 6 April 2017 to 5 April 2025Ìý
Deemed domicile in the UK can now arise in three ways.ÌýÌý
Section 267(1)(a) IHTA 1984 remains the same.Ìý
Section 267(1)(aa) provides that a formerly domiciled resident in the tax year in which the relevant time fallsÌýisÌýdeemed domicile.Ìý A formerly domiciled resident was born in the UK, with a UK domicile of origin and is Income Tax resident within the UK in the relevant year and one of the two years preceding the relevant year.Ìý
Section(1)(b) IHTA 1984 changes to a 15 out of 20-year rule. The individual must have been resident for Income Tax purposes for at least 15 of the 20 years preceding the relevant tax year. Additionally, the individual must have been Income Tax resident for at least 1 of the 4 years ending with the relevant tax year.ÌýÌý
These rules usually apply both for transfers on death and lifetime transfers that are chargeable to Inheritance Tax when made. The only exception is for transfers on death where the deceased person바카라 사이트™s domicile was Italy, France, India or Pakistan.Ìý
Sections 267(2) and 158(6) IHTA 1984 preclude the application of section 267(1) to the Double Taxation Conventions 바카라 사이트˜with respect to duties on the estates of deceased persons바카라 사이트™ between the UK and the countries referred to in paragraph above. These conventions were negotiated before 1975. More recent ones are not covered by this restriction.Ìý