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Domicile regulations | 13
circle6 Both the content and the form of your Will
circle6
is governed by UK law; and,
If you do not make a will and so are
intestate, the UK intestacy rules apply.
Internationally, “tie breaks” have been
devised for situations where each country
claims jurisdiction. For example, a marriage
between a French national and an English
domiciliary, could be judged valid under
English law and invalid under French law or
vice versa. This is called a “conflict of laws” and
private international law is the highly complex
code which seeks to resolve those conflicts.
Double Taxation treaties attempt to protect
against two countries claiming the same tax on
the same event, establishing which country is to
have priority. By and large, where real property
is concerned the law which governs it will be
the local law, that is, the law of the country or
jurisdiction in which the land is sited.
Susan Midha is a partner at Adams &
Remers Solicitors www.adams-remers.co.uk
susan.midha@adams-remers.co.uk or call
01273 480616.
This article is not intended to be a full
summary of the law and advice should be
sought on specific issues.
So what does this mean in practice? Let’s rules there require everything to pass to the Rudolph’s child has a domicile of dependancy
consider Rudolf Rassendyll and his wife Flavia. Ruritanian Fund for Poor Politicians. Her in the UK, can be taken in the English courts
He is Welsh. She is from Ruritania, which is English real property will pass under the and when the inevitable divorce occurs
where they met and lived for many years English intestacy rules. She can make a Will (successful marriages between a Britain and a
before deciding to come to live in the UK, in a which decides to whom her English real estate Ruritanian are unheard of) financial provision
property they own jointly. Flavia is not sure is to go, but because she is not domiciled in and custody of the couple’s children can, much
she wants to stay here permanently. the UK her other property world wide (and to Flavia’s chagrin, also be decided by the
Rudolph is UK domiciled because he has a the Damian Hurst and other personal English Courts (on the basis of Rudolph’s
UK domicile of origin and now lives in the belongings in her new home) will not domicile here). She is by far the wealthier of
UK. Flavia is not. UK law does not usually necessarily be effectively disposed of by an the two and didn’t think to put in place a pre
require us to know where she is domiciled: she English Will. It depends on whether it or post nuptial agreement before coming to
is either UK domiciled or she is not. conforms with Ruritanian law. If it doesn’t, the UK. In the Ruritanian courts, everyone
Neither of them yet has a Will. Rudolph’s then the poor politicians will be in for a keeps their own property, and Flavia is
entire estate worldwide (except the real estate windfall and Rudolph would not be able to shocked when she is advised about the wide
he owns in Ruritania) will pass under the challenge that in the English Courts. The Act ranging powers that a UK court has in
English intestacy rules. By virtue of these, only which would allow Flavia to challenge her matrimonial proceedings where one of the
£250,000 will go to his wife outright and the husband’s will does not allow challenges to the parties before it is a UK domiciliary.
balance will go into a trust between her and will of a non-UK domiciliary. What Flavia has learnt is that it’s easy to
their children, Michael and Rupert, and For tax purposes, again there are differences become UK resident – you just cross the
Rudolph’s child from a previous relationship, between them. Rudolph is taxed on his income Channel (or the Atlantic) and stay here. The
Antoinette. If Rudolph makes a Will, its and capital gains worldwide, and, on his death, legal implications of doing so, however, are
validity will be governed by English law. This his worldwide estate will be subject to largely dependant on whether you become UK
provides that he can make a Will leaving his Inheritance Tax. Whereas Flavia, at least for the domiciled. To the extent that that is a matter of
assets however he chooses, although the court first seven years of residence here, will not be choice, that choice should be based on a clear
can award funds to anyone, including his wife, subject to income tax or capital gains on funds understanding of all the issues. While the UK
for whom his will does not make reasonable not bought into the UK. She will only be legal system may be very different from the
provision. subject to UK IHT or her UK sited assets until one which we have assimilated from our
Because she is not UK domiciled, Flavia’s she has been in the country for 17 years, when country of origin, with foresight, planning and
estate (except any real property she owns IHT will extend to her assets worldwide. the right advice, it may well be possible for any
which is sited in the UK) will devolve in The legal decision as to whether Flavia can one choosing to settle here to achieve the best
accordance with Ruritanian law. The intestacy adopt her stepdaughter, Antoinette, who as of both worlds.
www.investmentinternational.com November 2009 Investment International
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