Someone with non-domiciled status, sometimes called a ‘non-dom’, is a person living (i.e. resident for tax purposes) in the United Kingdom who is considered under British law to be domiciled (i.e. with their permanent home) in another country. This can have significant tax advantages for the wealthy.
What are the types of domicile?
Generally, there are three kinds of domicile: domicile of origin, domicile of choice, and domicile by operation of law.
How is domicile decided?
A person can take on a domicile by choice by taking up fixed residence in a country different from the domicile of birth. The person requires to prove his/her intention by acts or declaration for changing domicile.
When does a non dom become a UK domicile?
A formerly UK domiciled resident will be deemed domiciled in the relevant tax year where he was born in the UK, had a UK domicile of origin, was resident in the UK for that tax year, and was resident in the UK for at least one of the two tax years immediately preceding that year.
When do you need to consider non domiciled tax?
If you are a UK resident non-domiciled individual with foreign income and gains of more than £2,000 per tax year you will need to consider every tax year which of the two basis is more tax efficient for you. This is very important.
What’s the difference between resident and domicile in the UK?
Understanding the differences between the two and knowing your resulting obligations is vital for tax purposes, both in the UK and in your country of residence. Making an assumption or about your residency status can have serious financial consequences but understanding whether you are domicile or resident is not straight forward.
When does a non resident become an ordinarily resident?
Once a person becomes ordinarily resident, she will continue to be ordinarily resident here until she has been non-resident for three consecutive income tax years. This term is much harder to explain because, unlike residence and ordinary residence, it has never been defined in tax legislation.
