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An individual must have a domicile but can only have one country of domicile at a time. By contrast, it is perfectly possible to be considered a resident of more than one country in a tax year or indeed a resident of no country. An individual’s domicile may change over time, and there can be complexities in determining it, particularly where individuals move from their country of birth and their children are subsequently born and living elsewhere.
Domicile of origin, choice and dependency
There are three distinct types of domicile recognised under UK common law. The simplest is domicile of origin, which is acquired at birth and is that of the child’s father (where the parents were married), and of the child’s mother (where they were not).
Second is domicile of choice, which an individual may establish in an alternative country. This relies partly on establishing residence in the chosen nation. However, it is more important to demonstrate over time the intention to remain there indefinitely, in part by severing ties to the origin country.
It can be difficult to establish a domicile of choice and lose a domicile of origin. Nevertheless, individuals living in the UK for many years may be treated as acquiring a UK domicile of choice without express intent. This is particularly likely where they have established strong links and significant family ties to the UK and lost connection with their country of origin. This inadvertent acquisition of a UK domicile of choice is the most common argument put forward by HMRC if it makes enquiries.
Finally, there is domicile of dependency. A minor under 16 years of age acquires the domicile of their father or mother (under the domicile of origin rules). If their father’s domicile of origin is displaced with a domicile of choice before the child is 16, however, the child’s domicile also changes.
To take a practical example, a child is born to married parents with a German domicile of origin will also have German domicile. If the father moves to Canada before the child is 16, but returns to Germany within a few years, both are likely to retain a German domicile. However, if the father asserts a domicile of choice in Canada, the child acquires a domicile of dependency there. This replaces his German domicile of origin.