HMRC internal manual

Residence, Domicile and Remittance Basis Manual

RDRM25050 - Domicile: Deemed domicile: Losing deemed domicile status

It is possible for an individual who becomes deemed domicile under Condition B to lose this deemed status - it does not last indefinitely. They can lose their deemed domicile status if they leave the UK and there are at least 6 tax years as a non-UK resident in the 20 tax years before the relevant tax year. Different rules apply for IHT purposes.

Example 1a

If we look at the Sergei example again (RDRM25040), but instead he leave the UK on 7 April 2019, (so he is not UK resident in that tax year), to work in Australia initially on a 3 year contract.

After the 3 years Sergei takes a sabbatical and visits Peru for 12 months, returning to Australia on 8 April 2023, where he is offered his old job back again.

Sergei remains in this position until 20 June 2025 when he is seconded to the UK and becomes resident here.

As Sergei has not been UK resident for 6 tax years he has lost his deemed domicile status. This will be the case until he satisfies Condition B again - that he has been UK resident for 15 of the last 20 tax years, preceding the relevant tax year.

Example 1b

As per the example above, but instead Sergei returns to the UK on 4 May 2023. To work out whether he is domiciled for 2023-2024 Sergei needs to look at the previous 20 tax years.

In this scenario Sergei has been resident in the UK for 16 years out of the last 20 tax years and so will be deemed domicile throughout.