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Weaselwatch: 40% per annum guaranteed

You’ve probably noticed this advert in the newspaper:

40% per annum guaranteed

At first sight the headline suggests it’s for an investment plan, but if you read the text you discover that it’s about avoiding paying tax.

Their point is that if you are a British national you may be liable to inheritance tax, unless you can prove you are domiciled overseas.  They claim that "long-term expatriates can apply for non-domiciled status".  I am not an expert on tax, but I think this is misleading.  Domicile is a matter of fact, based on your circumstances.  You don’t need to apply for it! 

If the British Inland Revenue chase you for tax you can declare that you are domiciled overseas, and they may check that this is true and ask for proof, but otherwise it’s exceedingly simple.  For a few years after I moved to Hong Kong they sent me an annual tax return, I duly filled it in saying that I was domiciled overseas, and that was the end of the matter.  Now they don’t bother anymore.  There may be a few special cases where your country of domicile may be a matter of dispute, but for most people it’s no problem at all.  Which might explain why this company has a 100% success rate helping clients apply for non-domiciled status.

Regardless of all of that, the headline is obviously untrue.  Their point is that your estate might be subject to 40% tax.  Well, maybe, but that’s a one-off payment.  Not 40% per annum.  Weasels.

However, you have to give them credit for grabbing my attention.  If I ever want some help in doing something that I could perfectly easily do myself, I certainly know who to call. 

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One response to “Weaselwatch: 40% per annum guaranteed”

  1. fumier avatar
    fumier

    You are correct; domicile is a question of fact. Depending on how it has been deternmined it may be described as a domicile of origin, a domicile of dependency or a domicile of choice.
    The last of these is the one normally in question for tax reasons, and this is in turn determined by residence and intention, i.e. whether the person genuinely intends to make the jurisdiction concerned his/her domicile.
    A domicile of choice cannot easily be acquired and this can throw up some strange results, such as an adult having their parents’ domicile at the time of their birth, even if they have never been to that country. This might happen if they have never demonstrated sufficient intent to acquire their own domicile of choice, and they are no longer a dependent hence cannot take parents’ current domicile. The law is therefore thrown back to their domicile of origin (i.e. at the time of their birth) which would most likely be their father’s domicile at that time.

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