One important area which is due to come up in the Advanced Tax exam is advising an individual on overseas aspects.

In order to do this, you first need to establish the individual’s domicile. We generally acquire our domicile of origin at birth from our father.

Until the age of 16, you are still a dependent so if your father changes his domicile, you travel with your father. This is called domicile of dependence.

After the age of 16, you are an adult in your own right and can establish a domicile of choice by severing ties with your domicile of origin and acquiring a permanent residence in your country of choice.

The most important aspect of domicile is deemed domicile (deemed means assumed in tax).

Despite your domicile, you could be treated as deemed UK domiciled if you have been UK resident for at least 15 out of the last 20 tax years. The 15/20 rule relates to all the taxes (inheritance tax, income tax and capital gains tax)

For inheritance tax purposes, this means that you are now subject to IHT on your worldwide assets instead of just your UK assets.

For income tax and CGT, you are now taxed on your worldwide income and gains as long as you are UK resident. You cannot make the remittance election.

For income tax and CGT purposes, you are treated as deemed UK domiciled if born in the UK with a UK domicile of origin, if you are UK resident in the current tax year.

For IHT purposes, you are treated as deemed UK domiciled if born in the UK with a UK domicile of origin, if you are UK resident in the current tax year and one of the two previous tax years.

Finally, for IHT purposes only, if you leave the UK, you are still treated as deemed UK domiciled for the next 3 tax years after leaving the UK

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