IHTM13001 | Domicile: Introduction

From 6 April 2025, for inheritance tax purposes, domicile is replaced by long-term UK residence and you can find details of these rules at IHTM47000.

The law of domicile is important for Inheritance Tax (IHT) for several reasons:

• It is a common law concept (IHTM13021) that will determine which rules apply for succession to personal (movable) property, wherever it is situated, and help establish 'who gets what'.

• It limits the charge to IHT to people domiciled in the UK or with assets sited in the UK. For example if someone creates a settlement with assets outside the UK, when they are not domiciled in the UK, the settlement could be excluded from the charge to Inheritance Tax (IHTM04000).

• It is one of the conditions for leaving the value of non-sterling bank accounts (IHTM04380) in the UK out of account.

• As part of protective and anti-avoidance legislation. For example:

• Spouse or civil partner exemption may be limited if the recipient is domiciled outside the UK

• Long term tax residents of the UK may be treated as being domiciled in the UK for the purposes of IHT, even though they have a domicile outside the UK under general law (IHTM13024)

• Those who were UK domiciled but have emigrated recently could also be treated as being domiciled in the UK (IHTM13024).

• Lastly, double taxation conventions (IHTM27161) apply to people domiciled in certain countries and these may have tax implications both before and after 6 April 2025 when the long-term UK residence rules are introduced. For example:

• Property can be removed from the charge to IHT, depending on the terms of the convention.

• The availability of a tax credit can depend upon the 'fiscal' domicile of the taxpayer, which may be defined by the terms of the convention.