Income tax and IHT for non UK domicile
Question: I am interested in becoming a non UK domicle, I believe i fit as i am married to a Kenyan and have made it my home since 1998 i have considerable assets in Kenya, with very little time visiting UK , How ever i do have a small house in UK that at moment i declare rent and pay tax on it, Can i give the house worth around 140,000 to my daughters from previous marriage, as it left to them in my will any way, and there fore cut my ties with UK for income tax and IHT Answer: As you state to establish UK domicile you need to effectively cut all ties with the UK and establish an intention to live overseas permanent 'for the rest of your days'. You need to be able to show close ties to the overseas jurisdiction (Kenya) and and intention to remain there. It's difficult to obtain certainty as to your domicile status as if questioned it would be looked at over your lifetime. However, if you are a non UK domiciliary with the no UK assets its unlikely that UK probate would need to be obtained in any case. You can see more in this article: http://www.wealthprotectionreport.co.uk/members/Establishing_an_overseas_domicile_of_choice_in_2010.cfm You could retain the UK property, but aside from requiring UK probate this would then raise the issue of whether you have sufficient intention to make Kenya your new domicile of choice. In terms of the transfer of the property, yes you could do this. As a non resident there would be no CGT on the transfer. The transfer would be a potentially exempt transfer ('PET') and included in your estate for 7 years (ie you would need to survive for 7 years for it to be exempt from IHT). As you state by transferring the property you'd then also avoid having a UK income tax liability.
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