Change in IHT approach to domicile status

HMRC have published detailing changes to the circumstances under which they will consider an individual's domicile and decide whether to make a determination of inheritance tax based on the matter.

In future, the Revenue will consider opening an enquiry in which domicile could be an issue, or making a determination of IHT in such cases, only where there is a significant risk of loss of UK tax.

HMRC will use a wide range of factors to assess the risk. They will depend on the individual case, but will include, for example, a review of the information available about the individual on the department's databases and whether there is a significant amount of tax at risk.

The potential costs involved in pursuing an enquiry will be taken into account as will those of potential litigation should the enquiry not result in agreement between the taxman and the individual.

Individuals should bear in mind that enquiries into domicile involve a detailed inquiry into all of the relevant facts and HMRC are likely to require considerable personal information and extensive documentary evidence about the taxpayer and the taxpayer's close family.

This supersedes elements of Revenue & Customs Brief 17/09, issued in March 2009.

Issue: 4270 / Categories: News , Inheritance Tax , Residence & domicile