The matter of Lord Ashcroft, which has been extensively if not always clearly discussed in the national press of late, gives a reason for a few thoughts on the subject of domicile.

 

It seems that for many people (including those who should know better) the difference between residence and domicile remains obscure. Admittedly this is not helped because in most countries the terms are synonymous, but for all countries except the UK and Ireland (where the rule was inherited from the UK) there is only one criterion that matters, and that is residence (and for the USA, citizenship).

 

Lord Ashcroft was born in the UK but has spent much of his life in Belize, which is presumably where he claims to be domiciled. His father was a colonial civil servant, so one would assume that his initial domicile was indeed English, and that this is said to have changed at some point. There are (on the face of it) some resemblances to Gaines-Cooper [2] here (who, you will recall, has been held to be UK domiciled) as Lord Ashcroft has homes in London and Maidenhead as well as Belize.

 

He is apparently resident in the UK (having become resident since the early days of the controversy) -  the “deal” which accepted that he is “long term resident” rather than “permanent” has presumably the point that an intention to remain permanently in the UK might well be a resumption of a UK domicile. It is it seems unclear whether that “deal” was done with the Treasury or quietly with HMRC.

 

The HMRC manual says any change (to a domicile of choice) must be established by very clear proof by the person(s) who assert change. They go on to say that for such a change to be accepted, the taxpayer needs to establish residence in the new country with the intention of remaining permanently or at least indefinitely. We do not know how long ago it was accepted by HMRC that he had changed his domicile (assuming, of course, that it is accepted by HMRC).

 

It appears that the first tax case to mention domicile is CIR v Cohen in 1937 (the cases quoted therein are not tax cases), which refers to the ITA 1918. The appeals were for 1931-2 and 1932-3. It appears that the remittance basis was always available for foreign income, right from 1799 and the beginning of the scheduler system. It apparently was applied to non-doms – or, presumably, withdrawn from those of UK domicile – in 1914.

 

For most of this time it has been fairly quiet as an issue; as late as 2002 Nick Davies is suggesting in the Guardian that there were no challenges issued by the IR to non-dom status.

 

However, the following was said in CIR v Cohen: In Munro v Munro Lord Cottenham observed that it was one of the principles adopted, not only by the law of England, but generally by the laws of other countries, that the domicile of origin must prevail until the party has not only acquired another, but has manifested and carried into execution an intention of abandoning his former domicile and acquiring another as his sole domicile ….Residence alone, he adds, has no effect per se, though it may be most important as a ground from which to infer intention.'

 

"The law," said Lord Cairns LC in Bell v Kennedy, "is beyond all doubt clear with regard to the domicile of birth that the personal status indicated by that term clings and adheres to the subject of it until an actual change is made by which the personal status of another domicile is acquired'". Then Lord Macnaghten goes on: "The onus of proving that a domicil has been chosen in substitution for the domicil of origin lies upon those who assert that the domicil of origin has been lost."

 

In other words, if you have a domicile of birth in the UK you have to show clearly that by your actions you have lost that domicile, and it may still be that your subsequent actions will in fact show that you have not lost it.