Non-Dom dies domiciled in England for 1975 Act claim

 In Probate, Tax

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cyprus domicile

In Holliday v Musa [2010] WTLR 839 the Court of Appeal upheld the decision of a trial judge that a man who was born in Cyprus, left for England in 1958 and signed a DOM 1 Form stating to the Inland Revenue that he considered he was domiciled in North Cyprus in  1997, died domiciled in England in 2006 so enabling a claim against his estate to be brought under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) by his cohabitant.

Why the decision matters to litigators?

  • That the deceased died domiciled in England and Wales is an essential pre-condition to jurisdiction under the 1975 Act.
  • A person born abroad may have lived in England for many years, formed strong ties with potential applicants living in England and yet the court may find that the deceased retained his domicile of origin.
  • In Agulian v Cyganik [2006] WTLR 565 an otherwise meritorious claim by a cohabitant under the 1975 Act failed because it was found that the deceased, again Cypriot by birth, had not died domiciled in England and Wales despite the fact that he had lived in England for about 43 years.
  • With increased mobility, there is increased need for practitioners to be alert to the jurisdiction issue.
  • It is apparent from the decision in Holliday v Musa that declarations by the deceased are not decisive; indeed they must be treated with caution where they are made to achieve a fiscal advantage – see paragraphs [66] and [69]
  • The Court of Appeal judgment in Holliday v Musa contains useful guidance as to the approach of practitioners and judges to cases where the acquisition of an English domicile of choice is in issue.

Key elements of the guidance from Holliday v Musa

  • Ask the right question, and
  • Bearing in mind the burden of proof and the degree of proof required,
  • Have regard to the right matters.

 Ask the right question

In cases such as Holliday v Musa where the deceased was born abroad, the potential claim is asserted in England because of the deceased’s long residence in and connections with England, and the only issue is whether he has acquired a domicile of choice in England, the only question for the court to decide is:

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  • Was it right at any stage of the Deceased’s residence in England prior to his death, to infer that he had formed the intention to settle in England indefinitely and abandon his domicile of origin? [paragraph 3].
  • Note: in Holliday v Musa the judge did not, at least with precision, define the principles of law so as to identify the only question she had to answer.

The burden of proof and the degree of proof required to displace a domicile of origin

  • The burden of proof is on the person asserting that the deceased has acquired a domicile of choice
  • Although the standard of proof is the ordinary civil burden (as applied by the Court of Appeal at paragraph [67]), the court must have clearly in mind the tenacity of a domicile of origin – this the 1st instance judge failed to do in Holliday v Musa – paragraph [10].

Have regard to the right matters

The Court of Appeal in Holliday v Musa re-stated that:

  • any circumstance in a person’s life can be relevant
  • Long residence in England is a starting point but no more
  • That the residence in England is the home of the deceased’ family is material
  • A vague intention to retire to the country of origin may not be sufficient to displace evidence of an intent to abandon a domicile of origin
  • Indications the deceased had made up his mind that he would end his days and be buried in England may carry more weight than express declarations to the contrary.

Practical consequences for advisors and advocates

  • Prepare a chronology – identifying those factors favouring retention of the domicile of origin and those favouring the acquisition of a domicile of choice
  • Treat with caution express declarations by the deceased made for tax purposes.
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