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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Domicile: Enquiries into domicile status: Reviewing an individual's domicile

This chapter of the guidance is largely intended to help compliance investigators in dealing with interventions and enquiries that involve a review of an individual’s domicile status. It is largely aimed at investigators dealing with income tax and capital gains tax. Caseworkers considering domicile for inheritance tax purposes should also consider the additional guidance in the IHT Manual.

There are likely to be only a small proportion of cases in which it is not possible to reach a conclusion quickly and easily by reference to the principles outlined at RDRM22000.

While the following guidance is fairly broadly applicable to domicile under the laws of the UK, it is written for use where an individual’s domicile is relevant to his or her direct tax liability in the UK. HMRC is responsible for the administration of the UK tax system; HMRC officers cannot offer advice on matters of common law or legislation that lie outside HMRC’s statutory remit.

Gathering Facts

Each person’s domicile depends on the facts of that individual’s life, and in some circumstances that of their parents too. The principles discussed in Chapter 2 have to be applied to the particular circumstances in order to reach a conclusion.

A correct conclusion depends upon a proper consideration of all the facts as a whole. Partial or selective reviews of the facts could lead to conclusions that are wrong or unsustainable.

Concentrating on the principles derived from the decided cases without collecting and analysing the facts risks arriving at a conclusion that is not supported by the facts.

HMRC will look to challenge cases where the facts presented appear to have been selected to fit the arguments rather than the arguments having been developed from a careful and objective review of all the facts. In doing so, HMRC staff should ensure that they have collected and analysed all the facts in an objective manner.

In reviewing domicile as a compliance risk it should be borne in mind that in the vast majority of cases the key facts should be easy to establish and indeed most individuals will have a clear and undisputed domicile upon review of the facts. Where an individual’s personal situation is more complex or where the facts presented do not lead readily to an easy conclusion then further exploration will be necessary.

Where HMRC is unable to accept that an individual is domiciled in a territory outside the UK, it could become necessary to resolve the disagreement through a hearing before the appropriate independent tribunal.

In some complex situations it may be possible to resolve the disputed domicile status by a joint referral to the tribunal (refer to ARTG7555).

This route may be preferable if there are aspects of the enquiry unrelated to domicile still to be resolved, or there is a need to review foreign income or capital and/or remittance issues which involve ascertaining the correct basis of assessment. You will need to seek approval from SPT, PTI Advisory, Residence and Domicile Technical Team before considering a joint referral.