IHTM13025 - Change of Domicile: Residence/Non- Residence/Ordinary Residence

The country of residence is important in general law as well as for tax, e.g. it is a condition for adopting a domicile of choice and the residence of a debtor may determine the locality of that debt.

For IHT, (non) residence is a factor in deciding whether, e.g.

• a person may be deemed to be domiciled within the UK ( IHTM13024)
• the value of non-sterling accounts are left out of account ( IHTM04380)
• government securities are excluded property (IHTM27240)
• to give up a charge to tax or give a tax credit under the Double Taxation Conventions (IHTM27160)
• a charge arises for property leaving discretionary settlements ( IHTM27212).

In practice, residence and ordinary residence are terms better known in the field of Income tax rather than IHT. However, these words are not defined for either tax. The courts have emphasised that "residence" and "ordinary residence" must be interpreted in their ordinary sense as commonly used.

In many cases a taxpayer’s residence will have already been considered by the Centre for Non- Residents (Residence Advice and Liability section). Sometimes you may come across the following abbreviations on files - "R" is for resident, "OR" for ordinarily resident, "NR" for non- resident and "NOR" for not ordinarily resident. This applies to a tax year as a whole.

You must follow the ruling that has been made. Exceptionally, if you consider that there is new & relevant information, which could alter the ruling, then discuss with Technical Group before approaching the taxpayer, CNR or HMIT.

In the absence of a ruling you should check for any other official records. In addition there may be personal records available to the taxpayer, like diaries or passports, which may assist in determining residency. In this respect, HMRC practice in relation to residence and ordinary residence is summarised in booklet IR20, which you should consult as necessary in consultation with Technical Group and/or CNR.

See IHTM13034 for liaison arrangements with CNR and HMIT.