We are well aware of the premise that a domicile of choice is more than making a decision to change your domicile. There has to be strong evidence to support a change. The latest written guidance on domicile from HM Revenue & Customs (HMRC) is outlined in the booklet HMRC6 which provides that the following factors would be taken into account: your intentions, your permanent residence, your ownership of property and the form of any Will you have made. The booklet makes it clear that this list is not exhaustive.
So why do we need to reacquaint ourselves with the principles behind acquiring a domicile of choice? Unfortunately, for the taxpayer, HMRC have been on a winning streak on some recent high profile domicile cases.
Robert Gaines-Cooper
Many felt the long running saga of Robert Gaines-Cooper had been concluded in February 2010 when a Court of Appeal judicial review found that Mr Gaines-Cooper did not fully meet the non-domicile status requirements. In essence, the Court found that on the facts of the case the UK remained Mr Gaines-Cooper’s “centre of gravity of his life and interests”. Many felt this decision was an example of HMRC moving the goalposts and that the need to sever all ties with the UK was the only way to obtain certainty.
However, Mr Gaines-Cooper has won the right to appeal to the Supreme Court, and we await the final outcome and any clarity the case provides of the domicile rules.
In the meantime, another recent Court of Appeal case, Holliday v Musa (2010) considered the domicile status of a deceased Turkish Cypriot national and provides a further opportunity to consider the Courts’ approach.
The case concerned an application for financial provision under the Inheritance (Provision for Family and Dependents) Act 1975. Domicile was relevant because in order to bring a claim, Diana Holliday (the deceased’s partner) had to establish that Ramadan Musa was domiciled in England and Wales at the time of his death.
The Court of Appeal reviewed the facts of Ramadan’s life at length. Ramadan was born in Cyprus, he married a fellow Cypriot and they had two children. Ramadan and his family moved to the UK in 1958 following sectarian violence.
Ramadan maintained connections with Cyprus and its politics. He was also an active member of the Turkish Cypriot community in England. Ramadan separated from his wife and she later died in 1992. He met Diana Holliday in 1998 and had a son with her in 1999. At the time of his death he had substantial business commitments in England and was in the process of purchasing a large property in Surrey for himself, Diana and the child to live in.
The Court of Appeal focussed on where the deceased’s permanent home was, and in this instance he had lived in the UK for nearly 50 years and had owned a residential property all this time. Whilst he maintained strong links with Cyprus and in his UK tax returns maintained to be domiciled in North Cyprus, this was not supported by Ramadan’s actions. The Court concluded that Ramadan had settled “permanently or indefinitely” in the UK.
More than intent
This case provides further evidence that when considering domicile there is a distinct lack of certainty. It is not sufficient to merely show an intent, and it is crucial that actions have taken place to support a claim that either a UK domicile has been lost or a UK domicile has not been acquired.
Until we have further clarification from the Supreme Court, the rules surrounding domiciles of choice remain unclear. Therefore, in the interim, to ensure that an individual’s domicile position remains as robust as possible it would be wise to have in place as much qualifying evidence to support a change as outlined in both the Holliday v Musa case and the published HMRC guidelines.
