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What does ‘Non-Domicile’ mean?

What does ‘Non-Domicile’ mean?

The recent revelations regarding Chancellor of the Exchequer Rishi Sunak’s wife not paying tax on overseas income has shone a bright light on the practice of claiming ‘non-domicile’ status. While there has been much discussion regarding Akshata Murty’s multi-millionaire status, including allegations that she has avoided paying £2.1m a year in UK tax, there has been little discussion regarding the exact nature of her ‘non-domicile’ status.  


Domicile is a legal concept used to determine which legal system (including which tax system) applies to an individual at any given time. It is therefore relevant to income tax and inheritance tax, but also marriage and divorce law, as well as wills and succession planning.

Crucially, your domicile is not fixed. Everyone starts with a domicile of origin – this could be either of your parents’ domiciles, depending on whether they are married, or if your father is alive at the time of your birth. This domicile is constant and can never be extinguished.

However, if an individual physically resides in a different country and has an intention to live there permanently and indefinitely (notwithstanding holidays abroad), they can acquire a new ‘domicile of choice’ to replace their domicile of origin. As such, a French individual who moves from France to the UK with an intention to live there for the rest of their life will become a UK domicile, rather than a French one.

This intention to settle permanently is key: an individual can acquire a new domicile on the very first day they arrive in a country, if they intend to settle there permanently. However, an individual will need to be able to demonstrate this intention with evidence, often including proof that they have cut all ties with the country of their domicile of origin.

It is not possible to simultaneously have two domiciles, but if an individual leaves their domicile of choice, their domicile will revert back to their domicile of origin. If they subsequently move to a third country, with an intention to reside there permanently and indefinitely, they can obtain domicile of choice in that country at that stage.  

What is ‘Non-Domicile’

If an individual is ‘non-domicile’ or ‘non-dom’, this simply means that they consider (and have declared) their permanent home to be outside of the country they are currently in, even if they live in that secondary country all year round. While this may sound fairly modern, it was first introduced in the UK in 1799 under King George III, and remains frequently used.   

Mrs Murty has a domicile of origin of India. Although she is also an Indian citizen, these are two distinct concepts, and her citizenship is not directly relevant to the question of domicile.

Mrs Murty married Mr Sunak in 2009, and moved to the UK in 2015. Under current UK tax law she will be deemed domiciled in 2030, if she continues to live in the UK permanently. However, for the moment, despite being married to the UK Chancellor of the Exchequer and living at 11 Downing Street, Mrs Murty asserts that she does not satisfy the requirements to gain a new ‘domicile of choice’ of the UK. This is because this intention to reside in the UK (which forms a key condition of claiming a new domicile) must be an intention for the UK to become the individual’s chief residence, permanently and indefinitely. Mr Sunak has commented that his wife cannot satisfy this requirement, as she has an intention to eventually return to India to care for her aging parents.

What are the Consequences?

As detailed in the extensive news coverage, there are multiple perceived benefits with claiming non-domicile status. This includes not having to pay UK tax on dividend payments from overseas companies and instead paying tax in your domicile state. In Mrs Murty’s case, for example, she will pay Indian tax rates on her dividends from international shareholdings (as low as 10%) rather than UK income tax (likely 39.35%).

However, non-dom individuals are still required to pay UK tax on all of their UK income, and may also be required to pay VAT on goods and services. Additionally, they must also pay an annual £30,000 fee for retaining the non-dom status if they have resided in the UK for seven of the last nine tax years. This increases to £60,000 once an individual has resided in the UK for twelve of the last fourteen tax years.

Furthermore, there are different rules for Inheritance Tax dependent on whether an individual’s estate falls into the UK tax regime.

Tax Planning and Asset Protection

Even for individuals who have always lived in Scotland, and intend to continue doing so, the question of domicile is therefore an important one, especially when it comes to Wills, Powers of Attorney, and Living Wills. If you have concerns about the potential implications of your domicile, or if you have valuable business assets outwith the UK, our team would be happy to help.

Contact a member of Thorntons Private Client team on 03330 430150 if you have any queries.

About the authors

Morna Coutts
Morna Coutts

Morna Coutts


Wills, Trusts & Succession

Hannah Smethurst
Hannah Smethurst

Hannah Smethurst

Trainee Solicitor

For more information, contact Morna Coutts or any member of the Wills, Trusts & Succession team on +44 131 322 6168.