Where do I legally belong when I die?

Where do I legally belong when I die?

Where do I legally belong when I die?

by | Inheritance

If, like myself, you live in another country to your country of origin, the question will be asked on your death – where do you legally belong too?  It may relate to death tax, how your body is to be interred or just even who should act on your death.

It won’t be decided by the parties with a vested interest until after your death, so it can be hard to prepare for if you are intending to see out your days on a desert island.  Indeed, you may believe that you have adopted another country as your home or returned to your country of origin, but it may not be your country of domicile.  And that one might want to tax you….?

What is this legal concept of domicile?  It is the state you consider your permanent place of residence. If you aren’t living there  now, then it’s the place to which you intend to return and make your home indefinitely. You can have more than one residence, but only one domicile.

When can this be problematic?   A recent UK case has just reached a conclusion that may have left a bereaved family in financial pain too.  The Court has ruled that a Calcutta-born businessman who moved to London in 2003 was still domiciled in England at the time of his death in December 2015, even though he was then living in India.  How did this happen?

Baldev Kohli was a successful restaurateur with a letting business.  With his health failing, in late 2015 he took a trip to India for ‘rest and recuperation’.  He died there unexpectedly 35 days later.  His UK widow, his executor and beneficiary, claimed he was domiciled in India.  This would ensure that a claim against his estate brought on behalf of a five-year-old girl alleged to be Kohli’s natural daughter by another woman would fail.

The High Court ruled Kohli intended to return and that he was UK domiciled.  Inheritance tax of 40% will be levied on his worldwide estate, after deducation and allowances, and the case for support of an alleged natural daughter is already underway.

If you want to investigate your own domicile status and you have a UK connection, there are some useful flow charts on HMRC website that can get you thinking!

 

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