Domicile determination: UK or Ireland?

B

bojeman

Guest
I have a question with which I hope members of the forum can help. I am trying to establish, if I were to retire and move to Ireland, whether I would be deemed domiciled in Ireland.

I have tried to keep the reason for my question brief, but felt obliged to include some relevant background information.

In the 1950s my father moved from Ireland to England and married my Irish mother. In due course I was born. Because my father had (according to UK rules) retained his Irish domicile, I obtained at birth an Irish Domicile of Origin.

We continued to live in the UK, and upon reaching adulthood (again, according to UK rules) my Irish Domicile of Origin was replaced by a UK Domicile of Choice. Although I have not lived in the UK for many years (work assignments have meant I have lived in a variety of countries), I have retained my UK domicile.

I am now planning to retire and live in Ireland and become ordinarily resident for tax purposes. However, for tax reasons, I am keen to retain my UK domicile. My concern is that the Irish Revenue may, either immediately or at some future date, deem me to be domiciled in Ireland. I am aware that everyone has to be domiciled somewhere, and therefore I would need to show that I had retained a UK domicile. I am familiar with domicile “pointers”, and my need to maximize those to the UK and to minimize those to Ireland.

My plan is to purchase a property in Ireland, but to avoid opening a bank account or acquiring other financial products there. I would have no business interests in Ireland, no income from Ireland, no memberships of clubs or other signs of establishing roots. I am single and so this should make things simpler. Despite this, my concern is that the Revenue may point out that I own property only in Ireland and that this alone points to my having effectively moved my life from the UK to Ireland.

They may also point out that I have an Irish Domicile of Origin, and that (at least according to UK domicile rules), if an individual “abandons” his Domicile of Choice, his domicile status automatically reverts to his Domicile of Origin.

Although I can counter by saying it is my intention to one day move back to the UK, and to point to my possession in the UK of bank accounts, ISAs, pensions, etc., I cannot prove my intention. I have no property ties to the UK and only distant family ties (I have closer family ties to Ireland).

I would therefore like to seek opinions from members of this forum as to where I stand; am I likely to be able to retain a UK domicile or will the Irish revenue have a strong case for deeming me domiciled in Ireland? I would be most grateful for any help.
 
Domicile is a complex area and there are no hard and fast rules, merely case law and associated commentaries.

My view is that you acquired an Irish domicile of origin at birth, that you never acquired a UK domicile of choice, and that you will therefore be Irish resident and Irish domciled when you move here.
 
bojeman said:
I would therefore like to seek opinions from members of this forum as to where I stand; am I likely to be able to retain a UK domicile or will the Irish revenue have a strong case for deeming me domiciled in Ireland? I would be most grateful for any help.
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Not a hope that you're going to get a definitive answer on this unbelievable complex area of law. You missed one pointer though. Where do you intend to be buried? (Also have a look at the Brian O'Donnell Vico saga where he tried to claim his domicile was the UK). As it happens we are abroad and unlike you but similarly for tax reasons here, we needed to show we were Irish domiciled to the tax authorities here. Having property in Ireland was an immense help in this regard and other ties that I was able to demonstrate. Other ex pats though made the mistake of selling their family home etc so that made it a lot more difficult for them, that's according to the guy working on this in Deloitte.

I think you need specialist legal advice and I'd warrant that can't be definitive either.
 
Gordon Gekko said:
My view is that you acquired an Irish domicile of origin at birth, that you never acquired a UK domicile of choice, and that you will therefore be Irish resident and Irish domciled when you move here.
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Thank you for taking the time to reply. You are correct that I acquired an Irish Domicile of Origin. I stated this in my original posting. I believe you are incorrect to say I did not acquire a UK Domicile of Choice. Could you please say why you hold that view, as everything I have read on the subject indicates it would have happened automatically when I reached the age of 16 and continued to live in the UK.
 
Bronte said:
Not a hope that you're going to get a definitive answer on this unbelievable complex area of law. You missed one pointer though. Where do you intend to be buried? (Also have a look at the Brian O'Donnell Vico saga where he tried to claim his domicile was the UK). As it happens we are abroad and unlike you but similarly for tax reasons here, we needed to show we were Irish domiciled to the tax authorities here. Having property in Ireland was an immense help in this regard and other ties that I was able to demonstrate. Other ex pats though made the mistake of selling their family home etc so that made it a lot more difficult for them, that's according to the guy working on this in Deloitte.

I think you need specialist legal advice and I'd warrant that can't be definitive either.
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Thank you Bronte. It sound as if you have the same issue as me, but in reverse. I take your point about having property in the country in which domicile is claimed. It would be much more straightforward if I owned property in the UK and just rented in Ireland. My ties to the UK are not strong, and this is my concern. I have UK bank accounts, ISAs, pensions etc., but I accept these are by no means proof of my intention to one day return to the UK. Even declaring an intention to be buried in the UK is not conclusive. Both my parents are buried in Ireland and so the Irish Revenue may see my desire to buried in the UK as a tactic rather than a true desire. My case is not strengthened by the fact that I have not resided in the UK for almost twenty years.

As you have pointed out, domicile is a complex, and far from transparent, area of law. I have of course considered taking specialist legal advice, but like you, I see no way in which anyone could give me a definitive answer. I can foresee a scenario where I move to Ireland, acquire a property, submit my first tax return and then have the Irish Revenue challenging my claim to be non-domiciled. All the cards would be in their hands.

I believe the situation would be different if I did not possess an Irish Domicile of Origin. Had I been born with a UK domicile I would have few worries. Obviously I cannot change this and so have to plan accordingly.
 
Are you sure considering you were born in the UK that it is still the case that you had your father's domicile of origin (I am aware that was the case, that it followed the father, but I had the impression that a lot of this changed to reflect the fact that it was ridiclous as you could be born and living with your mother elsewhere but have your father in the UK, but still have his domicile or origin - the world has moved on in many ways.)

If you decide not to clarify this legally, then perhaps a more pertinent question for AAM is to tell us what exactly you're afraid of tax wise and then perhaps the accountants on here, and others, might have some ideas for you to be as tax efficient as possible.
 
Bronte said:
Are you sure considering you were born in the UK that it is still the case that you had your father's domicile of origin (I am aware that was the case, that it followed the father, but I had the impression that a lot of this changed to reflect the fact that it was ridiclous as you could be born and living with your mother elsewhere but have your father in the UK, but still have his domicile or origin - the world has moved on in many ways.)
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The UK's HMRC publish a useful document known as RDR1. This covers matters of UK residence and domicile. I think you are correct to say that nowadays it is archaic to assign a baby the domicile of the father. This is the case though, unless the parents are not married. In this case the baby acquires the domicile of the mother.

I have been using this RDR1 document, including the flowcharts in it, as the basis of my conclusions as to my domicile.

[sorry, I cannot provide a link because I have mad too few postings to the forum]

Flowchart 2 on page 31 seems to be the one covering my situation ("You were born in the UK, your father was born in another country and you have no firm plans, or only short term plans to remain in the UK"). It starts with the question "Have you ever been resident in another country as an adult?" In my case I would need to answer "Yes" if I took up residency in Ireland. If I follow the flowchart's path the conclusion it leads to is "You are probably domiciled outside the UK". The word "probably" leaves some room for doubt, which perhaps a professional could advise further on.

Bronte said:
If you decide not to clarify this legally, then perhaps a more pertinent question for AAM is to tell us what exactly you're afraid of tax wise and then perhaps the accountants on here, and others, might have some ideas for you to be as tax efficient as possible.
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Good point, and you're right to imply that I may be concerned unnecessarily about the domicile issue. There are two reasons I would like to be considered UK domiciled while resident in Ireland. The first is Capital Gains Tax. I have some offshore shares and unit trusts. If I sell some of these at a profit and re-invest the proceeds in to other offshore shares and unit trusts (without remitting the funds to Ireland), if I were Irish domiciled this profit would be a taxable gain. If I were non-domiciled in Ireland it would not. The second is Inheritance Tax. I shall be leaving all my assets to charity. The UK allows this to be done free of Inheritance Tax.
 
bojeman said:
Thank you for taking the time to reply. You are correct that I acquired an Irish Domicile of Origin. I stated this in my original posting. I believe you are incorrect to say I did not acquire a UK Domicile of Choice. Could you please say why you hold that view, as everything I have read on the subject indicates it would have happened automatically when I reached the age of 16 and continued to live in the UK.
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- You acquired a Irish domicile of origin.

- I do not see evidence of an intention to remain in the UK permanently.

- The reality (you working abroad) supports that.

- In my view, you retain your Irish domicile of origin.

- Relevent case law (Claire Proes and all that good stuff) supports the above view.

- If I was in Revenue and came across your case and you were contending UK domicile, I'd be rubbing my hands with glee.
 
bojeman said:
Flowchart 2 on page 31 seems to be the one covering my situation ("You were born in the UK, your father was born in another country and you have no firm plans, or only short term plans to remain in the UK"). It starts with the question "Have you ever been resident in another country as an adult?" In my case I would need to answer "Yes" if I took up residency in Ireland. If I follow the flowchart's path the conclusion it leads to is "You are probably domiciled outside the UK". The word "probably" leaves some room for doubt, which perhaps a professional could advise further on.
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I very much doubt that even a professional could give you a definitive answer on this. That's because, as you know, in particular this area of law is very difficult to pin down. It might even take a court case. The only other way to have an idea, is to see how revenue treated someone else in your circumstances. How you find such a person, well maybe someone on AAM. And you'd have to fit the exact circumstances. Maybe ask revenue (send an email ! - they do answer, eventually). But one thing is on your side. There must be cases such as yours, because there is such a link between the two countries. Is there a UK version of AAM you could search, or an ex pat webite for British in Ireland. Those are the people you need to speak to.
 
Bojeman, following on from Janner's post. Do you or did you ever have an Irish passport?
 
Bronte said:
Bojeman, do you or did you ever have an Irish passport?
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No, I have never had one. As you know I would be entitled to own and have considered applying for one depending on how Brexit goes, but at the moment I have only a UK passport. If I were to acquire an Irish passport I would be adding a further pointer to being Irish domiciled.
 
Gordon Gekko said:
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- If I was in Revenue and came across your case and you were contending UK domicile, I'd be rubbing my hands with glee.
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Yes, that's the way I am beginning to see it. By the same token, if I were to return to the UK and claim Irish domicile there I think HMRC would be rubbing their hands with glee! Of course the benefits of living in the UK as a non-domicile have been much reduced since the introduction of the Remittance Basis Charge.
 
Bronte said:
I very much doubt that even a professional could give you a definitive answer on this. That's because, as you know, in particular this area of law is very difficult to pin down. It might even take a court case. The only other way to have an idea, is to see how revenue treated someone else in your circumstances. How you find such a person, well maybe someone on AAM. And you'd have to fit the exact circumstances. Maybe ask revenue (send an email ! - they do answer, eventually). But one thing is on your side. There must be cases such as yours, because there is such a link between the two countries. Is there a UK version of AAM you could search, or an ex pat webite for British in Ireland. Those are the people you need to speak to.
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Firstly, thank you for supplying the links to the HMRC document (RDR1).

The points you make about whether a professional could give a definitive answer is the reason that has held me back from consulting one. I would happily pay for a definitive answer, but as you say, it's impossible to get one. I am sure there are many cases similar to mine, but perhaps there are slight differences that make all the difference. I will contact the Revenue (I hadn't thought about that). I could ask HMRC I suppose. I have always found them to be helpful.

I have not found a UK forum website as good as this one. Motley Fool UK used to be good, but it has now closed. MoneySavingExpert is in theory good, but no so good in practice.

One other thought occurred to me: If I were to move to Ireland but only rent (not buy) a small property for a year. Remit minimal income during the year. On my tax return, declare some non-remitted income and claim non-domicile. See what the Revenue say; it would act as a test. If they challenge my claim then I could decide to leave Ireland without having spent much money. The problem is they may not challenge the claim in the first year (especially if the non-remitted income is minimal), but they could do so in subsequent years (after I had bought a property) if the non-remitted income was significant.

Overall, I am looking for an uncomplicated and stress-free retirement. I don't want any risk of tax investigations hanging over my head. I will make further enquiries, but if I feel there is a risk of future tax problems, I will perhaps give both the UK and Ireland a miss and seek another country.
 
bojeman said:
I will contact the Revenue (I hadn't thought about that). I could ask HMRC I suppose. I have always found them to be helpful.

...

Overall, I am looking for an uncomplicated and stress-free retirement. I don't want any risk of tax investigations hanging over my head. I will make further enquiries, but if I feel there is a risk of future tax problems, I will perhaps give both the UK and Ireland a miss and seek another country.
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You won't get much reassurance from asking Revenue or HMRC. Both of these bodies are in the tax collection business, not the advice business, and they routinely disclaim their own staff's "advice" whenever it suits them to do so. If this issue is important to you, and it sounds like it is, you need to spend money on proper professional advice from a tax consultant or solicitor with appropriate expertise in the area.
 
bojeman said:
Good point, and you're right to imply that I may be concerned unnecessarily about the domicile issue. There are two reasons I would like to be considered UK domiciled while resident in Ireland... The second is Inheritance Tax. I shall be leaving all my assets to charity. The UK allows this to be done free of Inheritance Tax.
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There is an exemption from Capital Acquisitions Tax for charities in Ireland too. Google CAT charities exemption for the Revenue link (I don't have enough posts to link directly).
 
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