Becoming 'Deemed Domiciled': A Case Study

Tax in ActionResidency & Domicile
Maria is from Australia but has lived and worked in the UK for many years. Let's see how she becomes 'deemed domiciled' and what that means for her tax position.

Maria is an Australian citizen and is Australian-domiciled. She moved to the UK on 1st May 2009 and has been a UK tax resident ever since.

The 15-out-of-20-Year Rule

A person becomes deemed domiciled for UK tax purposes once they have been a UK resident for 15 of the previous 20 tax years.

Maria's Timeline

  • The 2024/25 tax year (starting 6th April 2024) is Maria's 16th consecutive year of UK residence.
  • As of 6th April 2024, she has been resident for 15 of the last 20 years.
  • Therefore, from the start of the 2024/25 tax year, Maria is treated as deemed domiciled in the UK.

The Tax Impact

This is a major change for Maria:

  • Loss of the Remittance Basis: She can no longer use the remittance basis to shield her foreign income and gains from UK tax.
  • Worldwide Taxation: From 2024/25 onwards, she will be subject to UK tax on her worldwide income and gains on the arising basis.
  • Inheritance Tax: Her non-UK assets may now fall within the scope of UK Inheritance Tax.
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