A claim can only be established under the Inheritance (Provision for Family and Dependants) Act 1975 ("the Act") if the deceased was domiciled in England and Wales upon his death (section 1(1) of the Act). This is an interesting point of law and one which is likely to affect many more estates in the future, given the increased tendency for people (particularly the retired) to move abroad in search of sunnier climes. It is also a statutory provision that, it can be argued, is ripe for reform. Indeed, in the recent case of Agulian v Cyganik, Lord Justice Longmore expressed surprise that the "somewhat antiquated notion of domicile" still governs whether the estate of a person should make provision for his dependants and suggested that this may be better decided by reference to the concept of habitual residence.

Against this background, this article considers the concept of domicile and how it has been applied to cases brought under the Act. It will then consider the difference the concept of habitual residence would make were it to apply instead, particularly in the context of the current trend of people retiring overseas.

The meaning of domicile

A person is domiciled in the country in which he either has, or is deemed by law to have, his permanent home. The rules as to domicile are such that this legal concept may not correspond to social reality. For example, although a person may have no permanent home, the law requires him to have a domicile. Similarly, although a person may have more than one home, he can only have one domicile. Therefore, he may have a home in one country, but be deemed to be domiciled in another.

Determining domicile

At common law, every person receives a domicile of origin at birth which remains his domicile wherever he goes, unless and until he acquires a new domicile (a domicile of choice or a domicile of dependence).

Domicile of origin

The domicile of origin is received by operation of law at birth. This domicile cannot be divested, it simply remains in abeyance during the continuance of a domicile of choice and/or dependence but, if a domicile of choice and/or dependence is lost by abandonment, the domicile of origin will revive unless some other domicile of choice or dependence is acquired.

The domicile of origin is determined by the domicile, at the time of the child's birth, of the person upon whom he is legally dependent (as a general rule, this person is deemed to be the child's father if he is legitimate and his mother if he is illegitimate), rather than the place of birth.

Domicile of choice

Any person, not legally dependent upon another (see below), may at any time change his existing domicile and acquire for himself a domicile of choice by the fact of residing in a country, other than that of his domicile of origin, with the intention (i) of making his sole or principal permanent home in the country of residence and of (ii) continuing to reside there indefinitely. Note that it is immaterial if the residence is of brief duration, provided that it is accompanied by the required state of mind.

An intention to reside in a country for a fixed period of time, or until some clearly foreseen and reasonably anticipated event happens, will not be sufficient to establish that country as a domicile of choice. However, if the proper conclusion from all the circumstances is that the individual intends to make his home in a country for an indefinite time, he will acquire a domicile there notwithstanding a continual emotional attachment to some other country, or an intention to change his residence upon some vague or improbable contingency.

To put this in context, in the case of Furse v IRC, an intention to leave the domicile of choice upon an ill-defined onset of ill-health was not deemed to be sufficient to constitute abandonment of the domicile of choice as the ill-health concerned was deemed by the Court to be a vague and indefinite contingency. The net result was that the testator was deemed to be domiciled in England where he had lived for the last 40 of his 80 years, despite being a US national and declaring that he would return to the US when he became incapable of leading an active life on his farm in England. In contrast, in the case of IRC v Bullock, a Canadian-born individual lived in England for 44 years but was held to have retained his domicile of origin as he always intended to return to Canada if his wife pre-deceased him (an unambiguous contingency). Similarly, in Irvin v Irvin, an extended absence caused by employment in the Netherlands did not establish a Dutch domicile whilst the intention to return to England upon retirement remained.

The person need not intend, when he first arrives in the country where the domicile of choice is alleged to be acquired, to live in that country permanently. The intention may be, and often is, formed after the person has resided there for some time. Note that the person only needs to determine to settle in a particular country, not necessarily in a particular place within that country.

A domicile of choice can be lost by abandonment. For this to occur, it is necessary for the person concerned to cease to reside in the country in which he acquired his domicile of choice and also to cease to have the intention of returning to it as his permanent home.

Domicile of dependence

Children under 16 and people suffering from mental disorder may acquire a domicile of dependence based upon the domicile of the person on whom they are legally dependent.

Domicile and the Act

The requirements that must be satisfied in order to obtain a domicile of choice are strict. Together with the presumption against a change of domicile (particularly a domicile of origin), they impact heavily upon the application of the Act. The Court of Appeal judgment in Agulian v Cyganik, in which the fiancée of a deceased wished to bring proceedings under the Act for further financial provision, is a prime example of this.

The Court of Appeal held that, when deciding upon the issue of domicile, one needs to consider the whole of a person's life and the judge at first instance had placed too much weight on the last few years of the deceased's life (in which he had become engaged to the claimant). The Court of Appeal held that, when deciding upon the question of the deceased's domicile, the judge at first instance had limited his perspective on the deceased's life and had not taken into account all relevant factors as to where the deceased intended to live permanently. Although the deceased had moved to England when he was 18 and had lived and run a business here for 43 years, the Court of Appeal held that the evidence was not sufficiently "cogent and convincing" to establish a change of domicile from the deceased's Cypriot domicile of origin. Instead, the evidence that the deceased had lived the life of a Greek Cypriot (he talked Greek, he watched Cypriot television and he socialised within the Cypriot community), had kept in touch with the people he knew in Cyprus, had told friends and his bank manager that he wished to return to Cyprus when his business and personal situation permitted (note that this was not held to be a speculative possibility), had built up £1.3 million in a Cypriot bank account and had started looking for a property in Cyprus to which to retire, were all held to reinforce the enduring character of the deceased's Cypriot domicile of origin.

It follows that if someone with an English domicile of origin retires abroad with the intention of returning to England upon a specific, clearly definable, event occurring, he will not obtain the foreign place of residence as a domicile of choice. However, if this person makes his main home abroad (as a matter of fact, many of those who retire abroad do this and sell their homes in England) and if he intends to live in the foreign country indefinitely, he will acquire the new place of residence as his domicile of choice and the Act will not apply even if he has lived in England for the vast majority of his life. In this regard, the recent judgment in Gaines Cooper v The Commissioners for Her Majesty's Revenue & Customs is of note. In this case, on the basis that the property the appellant (an international businessman with England as his domicile of origin) had purchased in the Seychelles was not held to be his "chief residence", and that he had no intention of permanently and indefinitely residing in the Seychelles, he was not deemed to have acquired the Seychelles as his domicile of choice. Instead, although he spent less than a third of the year in the property that he had retained in England, the fact that he did retain a property in England enabled the Court to hold that his "chief residence" was in England, which remained "at the centre of gravity of his life and his interests" and therefore that he had never lost his domicile of origin.

As the intention of abandonment is of no effect without any actual change of residence, a person will not be deemed to have abandoned a domicile of choice unless he physically leaves the country, even if he has changed his intention and wants to return to his domicile of origin. Thus, in our scenario of a person retiring abroad, if this person is deemed to have acquired the new place of residence as his domicile of choice, he will not have relinquished this domicile upon his death even if he had an intention to do so (for example as he decided that he would be better off in sheltered accommodation back in England), if he did not actually change residence (ie he died before he made it 'back home').

Habitual residence

European law has introduced the concept of "habitual residence" into the law of England and Wales. In particular, pursuant to Council Regulation EC 1347/2000, a court in a contracting member state has jurisdiction in respect of matters relating to divorce, judicial separation and proceedings relating to parental responsibility, if it is the court of a country in which the spouses are habitually resident; the spouses were last habitually resident (and one of them still resides there); the respondent is habitually resident; or the petitioner is habitually resident (having resided there for at least a year, or six months if the petitioner is a national of, or is domiciled in, a contracting member state). Alternatively, where no court in a contracting member state has jurisdiction under that Regulation, the courts in England and Wales will have jurisdiction in such matters if both parties are domiciled in England and/or Wales.

The European legislation does not define the term "habitual residence", nor is there any specific judicial definition of the expression. However, pursuant to English case law, habitual residence is deemed to denote residence (in the form of a regular physical presence) adopted voluntarily and for some time. This means that a person is habitually resident in England and Wales if they are normally resident here and are only away for temporary or occasional absences. Using this test, a wife who had a London address where she spent 161 of the preceding 365 days was deemed to be habitually resident in England, even though she had a second home in Nigeria (Ikimi -v- Ikimi [2002]).

Domicile and habitual residence

The test of habitual residence does not involve the element of intention to reside permanently which is required by the test of domicile. Instead, it exists where there is evidence of substantial links between a person and a country in which he resides. This means that a person can be habitually resident in more than one country, or indeed none at all. In contrast, a person only has one domicile and they can never be without one.

Habitual residence and the Act

If the Act was amended to replace the domicile requirement with one of habitual residence, the outcome that was seen by some as unfair in Agulian v Cyganik should not be repeated in future. This is because, if a deceased is living in England and/or Wales upon his death and has been living there for a considerable period of time, his family and dependants should be able to bring a claim under the Act if habitual residence was the criteria for the application of it, rather than domicile.

But what difference would such a change make in the scenario foreseen in this article, namely that of a person who retires overseas? For those who pack up their life in England or Wales (such that they are no longer resident there) with the intention of living their remaining years in a new location, a change from domicile to habitual residence is likely to make no difference: the Act will still not apply. This is because if the person has actually ceased to be resident in England and Wales and has severed all connections with England and Wales in favour of a new foreign location, the person concerned is likely not only to have acquired a new domicile (one of choice) excluding the application of the Act as currently drafted (namely on the basis of domicile), but also to be deemed, on these facts, to not be habitually resident in England and Wales, excluding the application of the Act if the test for its application is changed to habitual residence.

However, for those who leave England or Wales declaring an intention to return upon a specific, clearly definable event, a change from domicile to habitual residence may be significant. Currently, these people retain England and Wales as their domicile. In contrast, it is likely that people who retire abroad and who, in doing so, do not retain a base in England or Wales, will not be deemed to be habitually resident in England, even if they intend to return. Accordingly, a claim under the Act may not be available to the family and dependants of such a person (despite being a UK national and living in England or Wales most of their lives) if the test for application of the Act is habitual residence rather than domicile.

"Originally it was a good idea; but the once simple concept has been so overloaded by a multitude of cases that it has been transmuted into something further and further removed from the practicalities of life."

This is what Dr JHC Morris observed about the concept of domicile in the last edition of Conflict of Laws that he wrote before he died (3rd edition, 1984). However, one questions whether the concept of habitual residence would really be a preferable basis for jurisdiction under the Act.

Bullet Point Summary

• For the Inheritance (Provision for Family and Dependants) Act 1975 ("the Act") to apply, the deceased must have died domiciled in England and Wales.
• A person's intention as to where they are going to reside permanently is critical in determining domicile.
• Substantial links with a country are sufficient to establish habitual residence.
• Nevertheless, if habitual residence becomes the test for application of the Act, it may well not be possible for the family and dependants of a deceased person to bring a claim under the Act if the deceased had moved abroad and died there.

For further information please contact:

Angela Bowman, head of department