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Readers will be aware that the domicile status of a certain "long-term resident" member of the House of Lords has become something of a political hot potato.

While there is case law to support the proposition that a person might be UK resident for 40+ years without acquiring a domicile of choice, the IHT legislation attributes a deemed domicile within the UK to a person who has been tax resident for 17 out of the previous 20 years of assessment. The way the rules operate mean that an individual may be caught after only 15 calendar years.

A lesser-known limb of the deeming provisions means that a person who was domiciled within the UK at general law will be deemed to remain so domiciled for IHT purposes for the three years following the acquisition of a domicile of choice elsewhere. Where this provision is of concern it is possible for the affected person to invest his or her assets so that they are immediately sheltered from IHT.

For UK resident individuals domiciled at general law in certain territories with which the UK has old-style Double-Taxation Agreements (e.g. India and Pakistan) the deemed domiciled provisions may not operate and specialist advice should be sought.

To discuss these matters further please contact Terry "Humperdinck" Jordan at terry.jordan@bkltax.co.uk.