Guidance

Inheritance Tax deemed domicile rules

Find out about changes to the Inheritance Tax deemed domicile rules from 6 April 2017.

• From: HM Revenue & Customs
• Published: 2 February 2018
• Last updated: 16 February 2018 — See all updates

From the 6 April 2017 the new domicile rules:

• reduce the number of years of residence needed in the UK for deemed domicile to apply
• change the way you count the years
• add a new category of deemed domicile called formerly domiciled resident

Deemed domicile - number of years

Before 6 April 2017 you were UK domiciled if you were resident in the UK for 17 of the 20 years of assessment ending with the year in which the relevant time fell.

From 6 April 2017 you’re UK domiciled if you’re resident in the UK for 15 of the 20 years before the relevant year.

You can still be treated as UK domiciled even if you’re not resident in the UK at the relevant time.

If you left the UK before 6 April 2017 and don’t return the new rules don’t apply.

Formerly domiciled resident

From 6 April 2017 there is a new category of deemed domicile.

You’re a formerly domiciled resident if you:

• are born in the UK with a UK domicile of origin
• have acquired another non-UK domicile of choice
• are resident in the UK and were resident in the UK in at least 1 of the 2 previous tax years

However, if you’re a formerly domiciled resident, property you settled on trust when you weren’t domiciled in the UK can’t be excluded property for the purposes of Inheritance Tax. This doesn’t apply if you’re only deemed domiciled under the new rules.

The new trust protection measures make sure an Inheritance Tax trust charge doesn’t arise when you’re no longer:

• resident in the UK
• a formerly domiciled resident

Technical guidance and examples about these changes are available in the Inheritance Tax manual.

Non UK domicile

If you’ve a non-UK domicile of origin you aren’t affected by the changes for formerly domiciled residents. You are however subject to the deemed domicile rules and the UK residential property rules.

Published 2 February 2018
Last updated 16 February 2018 + show all updates

1. 16 February 2018

   A link to technical guidance and examples in the Inheritance Tax manual has been added.

2. 2 February 2018

   First published.