Domicile and legal personality

When we refer to ‘persons’, we think about people, however, from a legal perspective, there are also other forms of legal personality who have their own identity, rights and liabilities. The law recognises both natural and juridical (a.k.a artificial) persons having their own right and responsibilities independent from each other.

There are two types of corporation: Corporation Sole and Corporation Aggregate.

Corporation Sole

Corporation Sole is an entity occupied by a single individual, where the office is separate from the individual who is the current office holder. They are mostly religious or political in nature and give the positions (offices) continuity while the office holders (individuals) change in time. Examples are:

  • CorporationsThe Crown
  • The Lord Mayor of London
  • The Information Commissioner
  • The Immigration Services Commissioner
  • The Official Custodian for Charities
  • The Public Trustee
  • The Registrar General
  • The Commissioner of Police of the Metropolis
  • The Archbishops of York and Canterbury
  • Bishops, Deans, Rectors and Vicars in the Church of England
  • The Children’s Commissioner for England and Children’s Commissioner for Wales
  • The Corporate Officers of the House of Commons and the House of Lords

Corporation Aggregate

These are the most common types of juridical or artificial persons, where a corporation is a group of individuals with its own legal personality, separate from the individuals that form it. They can be:

  • Partnerships, charities, limited companies and other incorporated bodies
  • Local authorities and other statutory corporations
  • Chartered institutions such as the Chartered Institute of Marketing or the Arts Council

Nationality vs domicile

An individual’s nationality is his/her status as a citizen of a certain country, also referred to as citizenship. Citizenship confers certain rights such as the right to vote and and also carries with it certain obligations such as National Service where relevant. Although most people have just the nationality of their birth, it is possible to have more than one, for example by marriage or by relocating to another country and becoming a citizen of that country.

For most legal purposes, nationality is not as significant as domicile.

A person’s domicile determines the jurisdiction of the courts in various matters such as marriage and family law, wills and probate issues, taxes, etc. Domicile is where an individual intends to live permanently. Domicile can be in a country different from that of citizenship, for example, a German national can be domiciled in the UK and a British citizen can be domiciled in Australia.

There can be various domiciles within what constitutes a single nation for the purpose of citizenship. Within the UK, a person can be domiciled in different jurisdictions for legal purposes, such as England and Wales, Scotland or Northern Ireland.

Domicile of origin

This is the domicile a person has at birth. Legitimate children take the domicile of their father, illegitimate children the one of their mother. Abandoned children take the domicile of the place where they were found.

Domicile of choice

Domicile of choice is when an individual decides to move to another country. A person’s domicile can change if they decide to go back to their country of origin or move to another country. When a person moves with the intention of staying there permanently, they will acquire that domicile, even if in the future they decide to move to another country, however, if they moved with the intention of staying only temporarily, they will retain their previous domicile.

It can be difficult to establish that one’s domicile of origin has been abandoned in favour of a new domicile of choice. Indication of a new domicile may be:

  • marrying a citizen or resident of the new country of residence;
  • becoming a citizen of the new country;
  • moving their family to their new country;
  • setting up and running a business in the new country;
  • buying property in the new country and selling any property in the country of origin;
  • transferring assets and investments to the new country.

Domicile of dependence

A child under 18 years old takes the domicile of their father (or mother if an illegitimate child) so if their parents’ domicile changes, the minor’s domicile also changes.

Relevant legislationThe Domicile and Matrimonial Proceedings Act 1973 deals with the domicile of minors.

Determining a person’s domicile

An individual’s domicile is not decided by statute law but by a combination of case law and applicable international law and statutes.

Unlike nationality, there is no official paperwork that determines someone’s domicile.
Every individual must have a domicile, but people can only have one domicile at a time.

Domicile can affect:

  • Taxation. This is probably the area where domicile has the biggest impact, so it’s not surprising to see most of the case law regarding domicile has involved the Inland Revenue.
  • Marriage and divorce. The validity of a marriage or a divorce can be affected by the parties’ domicile.
  • Wills, probate and estate distribution when someone dies without making a will.
  • Child legitimacy.
  • In IRC v Bullock (1976)  it was decided that a taxpayer who had been born in Nova Scotia, Canada in 1910 and who had come to the UK in 1932 and married an English wife had not acquired an English domicile of choice, since he had hoped to persuade his wife to live in Canada after his retirement, and in 1966 executed a will which appointed a Nova Scotia corporation as executor and declared his domicile to be Nova Scotia. The court held that in order to acquire an English domicile of choice, he had to intend to reside in England for the rest of his life until and unless something happened which was not indefinite or vague.
  • In Plummer v IRC (1988), the taxpayer’s family moved to Guernsey, but the taxpayer remained in the UK to complete her education. It was held that she had not acquired a domicile of choice in Guernsey since she had not lived there on a permanent basis.
  • In Surveyor v IRC (2002), a taxpayer had been born in the UK and had acquired a UK domicile of origin from his father. He worked in Hong Kong from 1986 to 1991, returning to the UK for holidays, and married a UK national who had been resident in Hong Kong since 1984. In 1991 he was made a partner in his firm and was offered the chance to return to the UK, which he refused, stating that he saw Hong Kong as his home and had no intention of returning to the UK and since the early 1990s he only visited the UK on occasional business trips. On the handover to China in 1997 he obtained permanent resident status. In 1999 he built a holiday home in Thailand and from 2000 to 2002 worked for his employer in Singapore, returning to Hong Kong regularly. He thereafter returned to Hong Kong and purchased an apartment with a Hong Kong mortgage. In 1999 he created a Jersey settlement with non‐UK assets, which would have been excluded property for the purpose of inheritance tax, if he were held to be domiciled outside the UK. HMRC contended that he was still domiciled in the UK, but, on appeal the Special Commissioner found that he had acquired a domicile of choice in Hong Kong, holding that the decision to abandon a domicile had to be unequivocal and the standard of proof was the balance of probabilities. The acquisition of a domicile of choice could not be based on slight indications or casual words and there had to be convincing evidence of the taxpayer’s intention. In this case the taxpayer had provided sufficient evidence of his intention to remain in Hong Kong to establish a domicile of choice.
  • In F and another v IRC (2000) it was held that obtaining a British passport and a certificate of naturalisation was not sufficient evidence of the establishment of a domicile of choice. If a domicile of choice had been established this had to be inferred from whether an individual had made a voluntary choice to reside in a country and remain there indefinitely. In this case, F was an Iranian who was on an exit bar list in Iran, but who had expressed a desire to return there in the future. He had therefore not abandoned his domicile of origin in Iran. Once acquired, a domicile of choice is less adhesive and if it lapses the domicile of origin is revived.
  • In Civil Engineer v IRC (2002) an individual returned to England after spending 29 years in Hong Kong. During that time he had set up two trusts and argued that he had established a domicile of choice in Hong Kong. The Special Commissioners found no evidence to support his case and ruled that returning to England with no intention to return to Hong Kong immediately revived his domicile of origin.