Domicile is legally treated in two different legal contexts and manner in India and for Indians. Even person of Indian origin who is residing in other jurisdiction or who has acquired a foreign citizenship has a close relationship with Indian domicile. This is because many succession matters are governed by the status of domicile of the concerned person.

The first domicile is a simple factum of residence in India and all Indian citizens have a single domicile, i.e. domicile of India irrespective of in which state they are residing. A person domicile in one state is domiciled in other states too and vice versa. That is because Constitution of India prescribes a single domicile for all citizens of India.

But when laws of two different countries are involved, the matter becomes very complicated. For instance an Indian citizen may be domiciled in UK or a UK citizen may be domiciled in India. Also a citizen of Germany may be domiciled in UK even though he may be a person of Indian origin or born in India.

Every case depends upon its own unique facts and circumstances and there is no single rule that governs domicile of a person. It is a very complicated process when conflict of laws or private international law is involved. It is complicated as not only laws of more than one countries are involved but their harmonious and effective implementation is also involved. If even a single fact or rule is ignored, it would result in wrong interpretation and domicile status.

We at Perry4Law Law Firm have been helping national and international clients for past two decades in domicile related issues and our research works are widely used and cited in US, UK, Germany, European Union and other countries. We have advised many people on their domicile, succession, inheritance tax, wealth tax and other property related issues for past two decades.

Many Indians who are residing in foreign countries face multiple problems due to conflict of law. As far as India is concerned, the law of domicile in India can be traced under the Indian Succession Act, 1925. The domicile under the Indian Succession Act, 1925 can be classified under the following categories:

(i) Domicile of origin,

(ii) Domicile of choice, and

(iii) Domicile by operation of law.

Domicile of origin is acquired by birth, domicile of choice is acquired by actively exercising an option to reside in a place different than the place of origin and domicile by operation of law is acquired by married women or due to deemed domicile implication of a law of a country. Often it is a conflict between domicile of choice and deemed domicile that is faced by most people.

Many countries like UK has now introduced the concept of deemed domicile for inheritance tax purposes. If a person has been residing in UK for certain years then he/she is deemed to be domiciled in UK for tax purposes. This is true even if such person is resident or citizen of another country like India. It also means such a person is liable for his/her global properties for inheritance tax purposes.

It is very crucial to do tax planning from very beginning to avoid unnecessary taxes that can be avoided with a sound legal opinion. Managing inheritance tax and other taxation issues once the tax proceeding are started is very difficult. We strongly recommend that individuals must consult qualified professionals as soon as possible to reduce the tax incidence or to avoid it altogether within the limits and norms prescribed by laws of various countries.