Emma Chamberlain of the Chartered Institute of Tax said of the domicile changes announced in the Pre Budget Report:
The CIOT hopes that the Government will introduce one simple statutory test on residence to end the current climate of uncertainty, which is very damaging for the mobile worker in the current global environment. Under present law a person who emigrates may not always under present law be able to determine whether he remains UK resident or not. We would welcome consultation on any proposed domicile and residence changes.
I agree.
One test of residence will do nicely.
It means domicile has to go.
It's good to see some realism on this.
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Yes, I agree too,
but from the other side of the coin, so to speak.
My own case: I have not been UK resident for well over half a century, I have never used UK welfare or Government services (but yet pay tax on my UK income). I renounced UK citizenship and I have no intention of returning to UK to live, but my worldwide assets are still at risk to UK Inheritance Tax, because the Revenue will not agree that I am not UK domiciled.
It would indeed be nice to see some realism on this.
It would indeed be nice to see Domicile go.
However, I think the Government sees too much money in plundering the estates of people like me, to agree to do away with Domicile.
Yes, one test of residence would do quite nicely.
But somehow I can’t see it happening.
Once the National Identity Register (NIR) is fully up and running, I think Government will keep the Domicile rule, so as to be able to get at my estate, while not allowing people to claim non-Domicile if they are on the NIR.
That would give the Revenue the best of both worlds, while we poor suckers lose out.
Where is the fairness in that?
Or don’t people subscribe to fairness any more?
I suggest you talk to a member of the Chartered Institute of Tax.
Richard
Oh, I have taken proper advice and at no little expense; I have already taken what action is possible to put schemes in place to reduce or obviate the potential tax burden on my estate.
However, despite having taken the recommended action to force a test of Domicile, the Revenue have ignored the relevant transaction – probably just for the time being, waiting for a potentially more lucrative opportunity to arrive! I am left with either accepting that fact, or initiating a potentially expensive set of legal proceedings.
And even if the Revenue eventually accepts that I was non-Domiciled they will take the date as being at a current date (probably at death) which means that they will consider my children to have been UK Domiciled at birth, even though they were not born in the UK and hold foreign citizenship). That means the problem continues down the generations. It is a continuingly expensive problem.
My point was, yes Domicile is unfair, but not only because non-Domiciliaries are not being taxed on world wide income. It is unfair because people with few or no links to the UK are at risk from the UK taxman.
John D
Then you highlight another reason why the domicile rule should go
Richard
There is too much money around the world that is potentially available to the British taxman, for any British government to fully abolish the domicile rule.
As I said in my previous post, by use of the National Identity Register, I think they will keep the domicile rule for those of us living abroad, and cancel it for people living in the UK.
That will leave the same inherent unfairness in the system, which people like me have no realistic opportunity to have redressed, because we have no meaningful representation.