Domicile
Domicile
The country a person considers their permanent home for life — a concept broader than tax residence. It affects inheritance taxes in a number of countries, for example in the UK.
- What it is
- The country a person regards as their permanent home for life
- How it differs
- A broader and more stable concept than tax residence
- What it affects
- Inheritance taxes and status in some countries (UK and others)
- Is it easy to change
- No: domicile is more stable than residence and harder to change
- Can be planned
- Yes: but it requires genuinely moving your centre of life
In plain words
Domicile is the country a person regards as their permanent home, the place where they ultimately belong. It is a legally broader and more stable concept than tax residence: residence can change as often as every year based on days, while domicile rests on a deeper connection with a country — usually the country of birth or one consciously chosen for life.
There is domicile of origin (inherited, usually from the father) and domicile of choice (when a person consciously moves their centre of life to another country for good). The key role of domicile is in inheritance and gift taxes: in the United Kingdom, for example, it is domicile, not residence, that determines whether worldwide assets are subject to inheritance tax.
Changing domicile is harder than changing residence: leaving is not enough — you need to genuinely and permanently move your centre of life, sever ties with the old country and put down roots in the new one. That is why domicile is planned for the long term, together with tax residence and the structure of your assets.
Where domicile matters
What matters about domicile
- Of origin (inherited)
- Of choice
- Usually from the father
- Permanent home
- A deep connection
- The intention to stay for good
- Inheritance tax
- Gifts
- Worldwide assets (UK)
- Genuinely moving your centre of life
- Severing old ties
- A long process
How domicile is planned
- 01Assessing your current domicile
- 02Calculating the tax consequences
- 03Moving your centre of life
- 04Severing old ties
- 05A new domicile of choice
What you need to know
- Domicile is a permanent home for life, broader than residence
- It can be of origin (inherited) or of choice
- It affects inheritance and gift taxes
- In the United Kingdom it determines the taxation of worldwide assets
- Changing domicile is harder than changing residence
Common mistakes
- Confusing domicile with tax residence
- Thinking a move automatically changes domicile
- Not accounting for inheritance tax under your old domicile
- Keeping ties with the old country while planning to change domicile
- Planning the asset structure without regard to domicile
What this means for a BRIDGES client
We review your domicile together with your tax residence: where you “belong” in law, how that affects inheritance taxes and the asset structure, and what it really takes to change domicile if that is your goal.
Frequently asked questions
01 /How does domicile differ from residence?
Residence is where you pay tax on income; it is determined by days and ties and changes relatively easily. Domicile is your permanent home for life, more stable, and affects above all inheritance taxes.
02 /Can domicile be changed?
Yes, through a domicile of choice: genuinely and permanently moving your centre of life to another country, severing ties with the old one and putting down roots in the new one. It is harder and slower than changing residence.
03 /What does domicile affect?
First and foremost inheritance and gift taxes. In some countries, such as the United Kingdom, it is domicile that determines whether your worldwide assets are taxed.
04 /Does a second passport change domicile?
No. Domicile is about an actual deep connection with a country, not citizenship. A passport does not change domicile by itself.
05 /Is domicile inherited?
Domicile of origin is inherited, usually from the father. Later it can be changed to a domicile of choice by genuinely moving your centre of life.
06 /When should domicile be planned?
In advance and for the long term — together with tax residence and the asset structure, especially if the goal is to optimise inheritance taxes.
See also
Read next
This material has undergone editorial review by BRIDGES.
Planning a transfer of assets or a move?
We will review your domicile and its tax consequences — and show what it takes to change it properly.