Lord Ashcroft reignites domicile debate

The 1873 and 1951 versions of Chambers’s Etymological English Dictionary define domicile as follows: n. a house: an abode.-v.t. to establish a fixed residence [L. domicilium – domus, a house].  The 1951 version, written in a less inclusive age, adds the phrase: ‘a man’s legal place of residence’.  The current online dictionaries give much the same definition. Can anyone explain why UK law chose to define domicile of origin as the place where a person’s father was born (assuming that person was born in wedlock) and not the person’s place of birth? Was it designed to be exclusive or inclusive? Then let us take an example. I was born in Scotland fifty some years ago and have lived there ever since. My father, who was married to my mother when I was born, was born in Italy but came here to find employment. He had always intended to return to Italy when he retired but he died before that was possible. Although when I was younger I had never thought of going to live anywhere else, I have now, in later life, become tired of the Scottish climate. I would now like to go to Italy to live after I have retired because the weather, the food and the wine there are more to my liking. What is my domicile and why?

Last, do we still need the term domicile in a modern tax system?

Determining domicile of origin is difficult without a proper family history. Just because the noble lord's father was a "colonial civil servant", it cannot be assumed that he was domiciled in the UK. Colonial and military families often spent their whole lives based in various parts of the Empire. They thought of themselves as "British" but many would probably not even qualify for British citizenship had the present nationality rules then applied. The UK is likely to contain many millions of non-doms. However, it is only relevant to the tax situation of a small proportion.

Simon seems to assume that if Lord Ashcroft was born in UK he will have a "domicile of birth" in UK. Is it not the case that place of birth is not the criterion for "domicile of origin", but rather the domicile of the father (or in some circumstances, the mother)? If parent were domiciled elsewhere, Lord Ashcroft may never have had domicile in this country.. and Belize may have nothing to do with it.

The discussion seems to have wandered all over the place.

My questions are:

Has he broken an agreement or promise?

Is he paying full UK tax on UK earnings?

and Is he paying full required tax to other countries on the rest of his earnings?

If the answers are YES, NO and NO, then he has to face some unpleasant music.

If the answers are NO, YES and YES then let us please turn our attention to getting this nation out of the mire and functioning as the caring robust society that we could be.

Stephen Molden

John, you are of course right. But given that his father was a colonial civil servant who worked in various countries, I think it reasonable to assume that his domicile was English.

You may well "think it reasonable to assume that his domicile was English" but this whole affair has been dogged by far too many ill-informed (or mischievous) comments based on unverified assumptions, often from people who should know better.

With another firm many years ago, a client's claim for change of domicile from UK to Italian was made.  HMRC agreed the change. 

Five years later HMRC through the dear old Special Office tried to overturn its earlier ruling.  We argued nothing had changed in our client's intentions in the intervening five years.  It followed that, having decided the client had acquired a domicile of choice, he had done nothing to change back; the inactivity was to his advantage.

It is quite possible HMRC made a Friday afternoon decision on Lord Ashcroft and is stuck with a similar ruling.  What stuns me is with the number of second and third generation of immigrants in the country (this is not a rant about immigration) we should have so many more residents in the UK who should be claiming non-dom.

 I am a non-dom. Living in the UK and paying my UK tax on UK income. So why must I pay UK tax on income elsewhere some which goes towards maintaining contractual obligations. If I bring it here then yes I will pay tax.

I also pay EU tax and am tax registered in the non EU area. So not ducking tax but see no reason why I must pay tax in the UK when creating those assets after tax money was used and this was generated outside of the UK before coming here.

It seems to be sour grapes by UK domiciled persons who see every non-dom as rich with ill gotten gains. Sorry I cannot retire (and therefore at some stage NEED to move out of the UK) and certainly not if remitting overseas income/assets to the UK. And I worked for it!

All left leaning parties in the EU and beyond would love to get hold of your hard earned savings and much legislation is mooted, by especially Gordon Brown (a spendaholic! if ever there was one, especially with other people's money), in the EU

Regardless of Ashcroft's domicile (be it of origin or choice) he pledged to pay UK taxes on an "as if" basis.  It seems clear to me that the purpose of the pledge was inarguably then, as it is now; if he wanted to be approved as a Peer of the Realm, he had to pay UK taxes on his worldwide income and gains (and, one presumes, wealth generally as far as IHT is brought into the picture). 

Whether he is, was, or will come to be, domiciled within the UK is not the issue, in my opinion.  It is simpler; he pledged to pay tax (or a sum falling to be categorised by another name, but equivalent to tax) to the UK purse in return for his title and all that comes with it.  He reneged on that pledge.

The focus on domicile is, I fear, more of the dog whistle stuff that has come to plague us, and to impact significantly on the perception of the UK in an international context. 

We should be forgetting the domicile question and, rather, concentrating on the real issue.  That being where is Ashcroft's 10 years of back taxes ?  If Cameron was up to anything, he would be demanding Ashcroft make good on his promise with effect from 2000 or be kicked out of the Lords. 

In passing, does not much the same apply to Irvine Laidlaw ?