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The recent case of Morris v Davies and others  EWHC 1773 (Ch) is an example of the difficult, and potentially litigious, issues that can be encountered when writing a Will. With large scale migration into the UK over the last 60 years and an increasing number of Brits emigrating, working and owning property abroad, the legal notion of domicile is becoming increasingly important.
Domicile is a general law concept that, effectively, seeks to identify which legal system applies to an individual. The phrase legal system is used here as many countries will contain more than one legal jurisdiction; the easiest example would be the UK, which has three separate legal systems (England and Wales, Scotland and Northern Ireland). Unlike nationality, you can only have one domicile.
This concept may be unfamiliar to many, however it has a profound effect on the way in which your estate can or will be distributed. It also affects inheritance tax and the availability of actions under English law against your estate, such as an action for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.
While the rules of domicile can be complex, it all boils down to one fundamental question; where is your permanent home?
To answer this, we first look to where you were born. This is your “domicile of origin”, and will stay with you for the rest of your life unless you later acquire a “domicile of choice”. This is somewhat misleading as you can’t simply elect to have a new domicile; the only way to acquire a domicile of choice is to move to another jurisdiction and form an intention to permanently remain there. There has to be strong evidence of this; usually, an effective severance of all or most ties with the country of origin is necessary.
It’s particularly relevant to estate planning because if you are domiciled outside of England & Wales, English succession law will only apply to what are called “immoveable” assets – i.e. land and buildings. Succession to “moveable” assets (cash, bank accounts, shares, personal possessions) will be governed by the law of your domicile.
Of course, the reverse applies to those with a domicile in this country but with assets abroad; local laws may well apply to your assets there and your English Will may not be valid. Making Wills in each country in which you own assets is a start, however care must be taken so that there is no conflict between the Wills and no ambiguity that may lead to disputes. It’s not unknown for an unwary or inexperienced will draftsman to accidentally revoke foreign wills by use of a general revocation clause. For those with assets in more than one jurisdiction it is vital to first work out where you are domiciled, and then seek advice on which laws will apply on your death to all of your assets worldwide. Then, wills should be drawn up in accordance with that advice.
So, if you were born outside of England and Wales, are a British expat abroad, own property outside of England and Wales or are married to someone who was born outside of England and Wales, then drawing up a Will can involve a degree of complexity that necessitates taking advice from a specialist Wills and Tax planning solicitor.
Unsurprisingly, I fall into that camp and am very happy to answer any questions.
In what is thought to be the first ruling on a lottery prize in divorce proceedings in England and Wales it was found that where a husband or wife was ‘unilaterally buying tickets from his or her own income’, without the knowledge of their partner, then it was ‘easy’ to see the prize was a ‘receipt by that party alone’ and therefore as ‘non-matrimonial property’.
HMRC is cheerily promoting online filing of tax returns set in the context of how things can so easily go […]
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