The discussion about Lord Ashcroft's tax status in the newspapers and between partisan politicians is getting me down a bit - so I thought I would set out some thoughts about domicile and residence.
Before I go further, what I write here is a picture postcard of the laws of domicile and residence - it is not legal advice and cannot be taken to be such or relied on as such by anyone whatsoever.
In English and Welsh law, domicile is not the same as residence or nationality and should not be confused with either. Generally, an individual's domicile is the country that he or she regards as his home - it is where he or she has the closest ties and, when he is away, it is the place to which he intends to return (although he or she can be away for a considerable period of time). Domicile is not specifically defined for tax purposes(you won't find a statutory definition either), but takes its meaning from the general law which has developed over a very long period of time - and possibly finds its origins in the concepts relating settlement which in turn were affected by the Poor Laws (look them up in Wikipedia if you want to know more).
Domicile of origin is the most important type of domicile. It is acquired by birth and usually by reference to the domicile of the father at the time of the birth. A domicile of origin is maintained unless it is abandoned by the acquisition of a domicile of choice. A person cannot have no domicile and so, if they abandon a domicile of choice without making a further choice of domicile, it is probable that the domicile of origin revives.
Domicile of choice is acquired by physical residence in the chosen territory combined with an intention to permanently or indefinitely reside in that territory. The second of these tests is subjective and we have seen recently that even people who depart and change their lives in significant ways can be found by the court not to have succeeded in removing themselves from the UK for the purposes of domicile - see
here, but remember that the case turned on questions of domicile not residence!
Residence and ordinary residence are also not defined in statute and as a result the dictionary definitions are usually adopted by the courts - ignoring any mental element whatsoever. A person can be resident in more than one country at a time - so a person who winters in Spain and summers in the UK can be resident in the UK and in Spain at the same time. A person can even have no residence - contrast that with domicile.
For residence, HMRC have adopted rules based on the numbers of days that a person is resident in the UK - if a person spends more than 183 days in the UK in any tax year, then he or she will invariably be resident in the UK for tax purposes in that tax year. If a person leaves the UK for a permanent residence abroad but spends 91 days per year or more in the UK then they are treated as continuing their UK residence.
Residents are liable to tax on their UK earnings - people resident here but domiciled abroad are not liable for earnings abroad so long as their earnings are not remitted here. So a non-dom is someone who pays tax on their UK earnings and on sums brought into the UK for their use. So to say that a non-dom is not taxed on their world-wide earnings is not quite true - because if they live here and have no income here but bring money in from abroad, they are liable to tax on the money they bring in.
Various proposals have been made to reform the laws of domicile and residence for UK tax purposes. What is remarkable is that the Labour Government's only significant reform of this area has been in 2008 when the £30,000 charge was made for registered long term residents who retained a domicile that was not the UK - it should be noted that the liability to tax on money remitted to the UK remains. Most other jurisdictions tax income on a residence basis - the quesiton I want to ask any Labour politician who complains about non-doms is this - why wait until now to complain and why did you not put in place the reforms you appear to have wanted at the beginning of your 12 years in power?