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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Change of Domicile: Residence/Non-Residence/Ordinary Residence

The country of residence is important in general law as well as for tax. For example, it is a condition for adopting a domicile of choice and the residence of a debtor may determine the situs (IHTM27071) of that debt.

For Inheritance Tax (IHT), residence (or non-residence) is a factor in deciding whether:

  • a person may be deemed to be domiciled in the UK (IHTM13024)
  • the value of non-sterling accounts are left out of account (IHTM04380)
  • government securities are excluded property (IHTM27241)
  • to give up a charge to tax or give a tax credit under the Double Taxation Conventions (IHTM27161)
  • a charge arises for property leaving discretionary settlements (IHTM27212).

In practice, residence and ordinary residence are terms better known in the field of Income Tax and Capital Gains Tax, rather than IHT. But, these words are not defined for either CGT or Income Tax purposes. More information can be found in theResidence Domicile and Remittance Basis Manual (RDRM) (HMRC website), which can be found at . Our customers can see this guidance at . In many cases a taxpayer’s residence will have already been considered. Sometimes you may come across the following abbreviations on records - “R” is for resident, “OR” for ordinarily resident, “NR” for non-resident and “NOR” for not ordinarily resident. This applies to a tax year as a whole.

You must follow the decision that has been made. Exceptionally, if you consider that there is new and relevant information, which could alter the decision, then discuss with Technical before approaching the taxpayer, PTI Advisory or HMIT.

If there is no information on any previous decision you should check for any other official records. You might consider asking for other personal records like diaries or passports, which may help you determine residency. HMRC practice in relation to residence and ordinary residence is summarised in booklet HMRC6 (HMRC website) and in more detail in the HMRC Residence, Domicile and Remittances Manual, which you should consult as necessary in consultation with Technical Group and/or PTI Advisory.

See IHTM13034 for liaison arrangements with PTI Advisory and HMIT.