A Question of Domicile
One of the questions asked frequently by people looking to move to France is how to retain domicile in the United Kingdom, or what constitutes being domiciled in France. This may be for a number of reasons, for example the buyers may realise that this will effect the succession of their estates on death. They may also be personal reasons, such as a desire to retain the benefits of the National Health Service and English Social Security.
It is possible under English common law to be resident in both England and France at the same time. However you can only be ‘domiciled’ in one country at any given time. However, you can only be ‘domiciled’ in one country at any given time. A person born in England or having an English father will have England ay his domicile of origin. Once he reaches the age of 16, his ‘domicile of choice’ is English if he remains physically present in England and has a substantial connection with England and regards it as his permanent home. Generally, under English common law he acquires a domicile in France if he moves permanently from England to settle in France and there is clear evidence of his firm intention to live permanently in France.
Where he has not shown an intention to move permanently from England his domicile under English common law may remain English – even though he may have resided in France for many years.
However the French have a slightly differing description of domicile. In brief, a person’s domicile civil is French if;
His principal établissement (roughly translated as permanent residence’) is in France; or
He intends to fix his principal établissement in France. This intention can be evidenced expressly by, for example, making a declaration to the Inland Revenue or other English authorities on his departure from England; and /or a declaration to the authorities in France. In the absence of express evidence, the proof of this intention depends on a number of factors including length of stay in France; family and business connections; possession of a carte de séjour; payment of income or other taxes to the French authorities, inscription on the French electoral roll and various other matters.
The definition does not rest there. As may be expected the tax authorities have a rather less specific definition and may treat that person as having a domicile fiscal if his permanent home or his principal residence is in France.
What constitutes the permanent home will normally be self – evident However by way of example on individual may be viewed as having his domicile fiscal in France if his permanent home works all week in England and returns at weekends to his spouse and family in France.
A person’s principal residence will be French if he resides in France for more than 183 days in the French tax year (1 January to 31 December), regardless of the type of accommodation occupied. It is often suggested that one is not deemed to have taken French domicile if he lives in France for less then this period: Unfortunately it is not so simple and an individual’s principle residence may be in France if he spends more time in France than in any other country. However the test of what constitutes the permanent home takes precedence over the rest of his principal residence.
Furthermore it is possible have French domicile for the purposes of French tax if an individuals economic interests or your occupation are based in France. There is however a relief to the occupation proviso if it can be shown that the occupation in France is ancillary to the main occupation elsewhere.
Naturally one of the major concerns of domicile is the way the succession of a person’s estate may be affected depending on where he is domiciled at the time of death. Real property in France devolves in accordance with French succession law in all cases personal property passes in accordance with the succession law of the domicile of the deceased. Where a property owner uses the vehicle of a company to own property it is the shares themselves that will become subject to the succession on the owner’s death; the shares are personal property and therefore if the owner is domiciled in England at the time of his death the shares will pass in accordance with English Succession law.
Where a person owns two houses, one in England and one in France, and dies leaving two children, the place where he is domiciled at the date of the death could substantially affect the away his entire wealth devolves; Two – thirds of his French real estate will automatically pass to his children; if he is domiciled in France two – thirds of his worldwide personal assets will also pass in this way although real property outside France will still pass in accordance with the succession law of the relevant jurisdiction.
Thus care needs to be taken when planning the devolution of assets in both France and England and consideration will always need to be given to intentions as to domicile. Account must be taken as to how the respective authorities will view the individual’s domicile. An individuals intentions can be overridden by these authorities will still treat your estate as being liable to English Inheritance for up to three years if you have been resident in England for at least seventeen of the last twenty years.
As a general overview it can be considered that if one is retiring to France, with a view to returning only occasionally to Britain. One will almost certainly take French domicile and should plan accordingly.
The English common law position should not be relied upon to allow someone to retain English domicile without taking account of the French position; and one should always bear in mind that where there remains any doubt the relevant English and French authorities might decide to try to establish a definitive answer, at the time and expense of the beneficiaries to the estate.
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