Deemed domicile for income tax and capital gains tax (2017/18 onwards)

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Deemed domicile for income tax and capital gains tax (2017/18 onwards)
  • Introduction
  • Deemed domicile tests
  • Income tax and CGT
  • IHT
  • Definitions
  • What counts as a tax year of residence?
  • What is a ‘returning UK domiciliary’ for income tax and CGT and how is this different to a ‘formerly domiciled resident’ for IHT?
  • Interaction with other provisions
  • Remittance basis
  • More...


Fundamental changes to the tax regime for non-domiciled individuals were introduced from 6 April 2017. They involve deeming an individual to beUK domiciled for tax purposes even though they may benon-domiciled in the UK under general law. The rules apply for income tax, capital gains tax (CGT) and inheritance tax (IHT).

Although the tests are slightly different for IHT compared to income tax and CGT (see below), broadly an individual is deemed UK domiciled if they:

  1. have been UK resident for at least 15 out of the last 20 tax years, or

  2. were born in the UK with a UK domicile of origin, subsequently left the UK and acquired a non-UK domicile of choice and later becomes resident in the UK

The 20-year ‘look-back’ period for 2021/22 (for example) is 2001/02 to 2020/21. The ‘clock’ does not start from 2017/18.

Where an individual is deemed domiciled for income tax and CGT, they are taxable in the UK on their worldwide income and gains on an arising basis. The remittance basis, under which the individual can shelter foreign income and gains from UK tax so long as this is not remitted (brought) to the UK, is not available unless the individual qualifies for the automatic remittance basis by virtue of having unremitted income and gains for the tax year of under £2,000. For details of the remittance basis, see the Remittance basis ― overview guidance note.

Where an individual is deemed domiciled for IHT, they are subject to IHT tax on their worldwide assets. In contrast, non-domiciliaries are liable to IHT only on assets located in the UK.

An individual’s deemed domicile does not affect the domicile status of their children under general law. Children of a father who is non-domiciled in the UK under general law are normally also non-domiciled, even if the father is deemed by these rules to beUK domiciled. Similarly, the child’s domicile status is assessed independently, such that if the child meets

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