Quite distinct to the concept of ‘residence’ (i.e. the country where you live) and ‘tax residence’ (i.e. the country in which you are subject to income tax), an individual’s domicile determines the law that applies to their assets for succession purposes.
At this time of year, it is always understandable when people move to sunnier climates, but we must not overlook the legal impact this can have on their estate.
Without even having to move abroad, simply deciding to leave Scotland and adopt the hustle and bustle of London life can also change the laws applicable to you.
When you meet with your lawyer to prepare your Will, you may find them asking about the town you grew up in, present circumstances and future plans. This is because an individual’s domicile is one of the first factors that must be considered before drafting a Will.
Establishing domicile allows lawyers to determine what type of Will you require i.e. a Scots Law Will or a Will governed by the law of another jurisdiction. In some cases, the answer may even be that you require both.
The starting point for domicile is that an individual will have a ‘domicile of origin’. This is acquired at birth. In most cases, this is the same as the domicile of an individual’s parents.
The complexity arises as a person can acquire a new domicile, known as ‘domicile of choice’.
In order to do so, you must (1) actually move to a new country and (2) show the intention to give up your previous domicile and intention to live permanently in the new country.
A domicile of origin will always be presumed unless there is evidence to the contrary. A holistic approach is often taken.
Considering the following questions is a useful starting point if you are now living out of Scotland and are wondering what your domicile is:-
The answer to these questions can help build a picture of what your domicile is. No single factor is likely to be considered determinative.
We must also consider the EU Succession Regulations, also referred to as ‘Brussels IV’. Although the UK did not sign up to these Regulations, they still affect individuals living in Scotland and the rest of the UK.
These Regulations essentially provide that the estate of an individual shall devolve in accordance with the law of the country in which they are habitually resident, unless that individual has specifically elected for their estate to be devolved in accordance with the law of their nationality.
This means that you may be able to make an election in your Will to determine which law governs your assets.
If you would like to know more about domicile or have any queries in relation to your Will and the governing laws, please do get in touch. We would be delighted to assist.