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Domicile and tax


Domicile is particularly relevant for inheritance tax. A British domiciled person is liable to pay inheritance tax on their entire estate wherever it is in the world. A ‘non-dom' is liable topay UK inheritance tax only on their UK property, unless they are "deemed" UK domiciled.

There is also a £325,000 limit on the amount a non-dom spouse can inherit free of inheritance tax, providing they have not elected to be treated as UK domiciled.

Domicile is also relevant for calculating income tax and capital gains tax on the income and gains of a UK resident non-domiciled individual.

Unless they choose to pay tax on worldwide income and gains as they arise, they may elect for the remittance basis and usually pay an annual charge of either £nil, £30,000 or £60,000 depending on how long they have been resident in the UK.

The use of the remittance basis leads to the loss of the tax free personal allowance and capital gains tax annual exemption. There is an exception to the charge where the unremitted foreign income and gains are less than £2,000.

Domicile example


  • whether you can speak Spanish
  • if you associate with Spanish nationals rather than just British expatriates
  • if you wish to be buried in Spain

Reform to the taxation of non-UK domiciled individuals

Changes have been made to restrict the availability of non-domiciled status for individuals who have lived in the UK for a long time, or who were originally UK domiciled, became non-domiciled and have returned to live in the UK.

Non-domiciled individuals are deemed to be UK domiciled for income tax and capital gains tax purposes if they have been a UK resident for 15 of the past 20 tax years, or if they were born in the UK with a UK domicile of origin and return to be resident in the UK in any tax year.

Deemed-UK domicile has been a feature of inheritance tax for many years, with long term residents previously deemed UK domiciled for inheritance tax purposes when they had been resident for 17 out of 20 tax years. This reduced to 15 years in 2017.

Where UK-deemed domicile status has been acquired by virtue of being UK resident for 15 of the past 20 tax years, it continues to apply after you have left the UK until you have been non UK resident for six of the past 20 tax years.


Non-domiciled individuals who are taxed on the remittance basis may use business investment relief to bring offshore money into the UK tax free providing it is used to purchase shares or make a loan to a UK business.

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Also, see our page on the rules relating to residence.