domicile
Domicile is the country you legally belong to for tax purposes, and it is far stickier than where you happen to be living.
In plain English
Residence is where you live. Domicile is where you belong, and the two can be different for decades, which catches diaspora Nigerians badly.
Domicile is a legal concept about your permanent home, the place you are considered to belong to and intend eventually to return to. You generally acquire one at birth, and shedding it is considerably harder than buying a plane ticket.
It matters most for inheritance tax and for how certain foreign income and assets are treated. In some countries, a person who is resident but not domiciled is taxed very differently from somebody who is both, and the difference can run to enormous sums across an estate.
This reaches a great many Nigerians abroad. Somebody who has lived in Britain for twenty years, holds property in Lagos, intends vaguely to return one day, and has never taken advice, may have a tax position quite different from what they assume, in either direction.
The rules are technical, they vary by country, and they change. This is not a subject for guessing or for advice from a cousin.
If you hold assets in more than one country, pay somebody competent once. It is one of the few professional fees that reliably pays for itself several times over.
A Nigerian who has lived in the UK for two decades assumes their Nigerian property sits entirely outside the UK system. Depending on domicile and residence rules, that assumption may be badly wrong, and their family finds out during probate.
Questions people ask
What is the difference between residence and domicile?
Residence is generally about where you physically live and for how long. Domicile is about where you legally belong, and it is far harder to change.
Why does it matter?
It affects inheritance tax and how certain foreign income and assets are treated. The difference can be enormous across an estate.
Can I change my domicile?
It is possible and it is difficult, requiring genuine and demonstrable intent to make another country your permanent home. Get proper advice.
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