The concept of domicile in tax legislation with special reference to Maltese law

Abstract

As this dissertation is concerned with the concept of domicile in tax legislation with special reference to Maltese law it is proposed to divide this work into three main parts : the concept of domicile in Private International law; the concept of domicile in tax legislation in the United Kingdom and elsewhere; and thirdly the concept of domicile in Maltese tax legislation. The first chapter, therefore, deals extensively with all the established principles relating to the concept of domicile in Private International law, first of all, in general and secondly as applied by the Maltese Courts. The state of a man's domicile has judicial jurisdiction over him i.e. the state can try a case against him in its Courts wherever he may be. In the field of Private International law, it is the law of a man's domicile that determines amongst other things, the validity of his will with respect to personal property or that decides how much property shall be distributed in the event of an intestacy. The law of a man 1 s domicile, also, may play an important part in determining his legitimacy and the validity of his marriage. The domicile of a person sometimes determines his liability or otherwise to the trot legislation of a particular country and it is mainly with this aspect that this thesis is concerned. First of all it is necessary to show what domicile really means. Admittedly it is a complicated concept which few people bother to know more about. As will be seen throughout this work the domicile of a person or a particular country may have important financial effects and for this reason an attempt is made to throw some light on the concept of domicile by dealing with the more important principles and authoritative decisions on the subject. Thus, it is a fundamental principle that every person must have a domicile at all times for if this were not so there would be occasions when a man does not have a personal law. A corollary to this principle is that a domicile is not lost until another domicile has been acquired and also, that a person cannot have more than one domicile at the same time for the same purpose. It is commonly agreed that there are three kinds of domicile: the domicile of origin, the domicile of choice and the domicile by operation of law. Each of these types is considered in the general part of the first chapter. As domicile is only limitedly relevant in respect of the tax liability of corporations the domicile of a company has been dealt with in less detail. In the second part of the first chapter the concept of domicile as applied by the Maltese Courts in the many cases that have so far arisen, is reviewed. It will be seen that the Maltese concept of domicile is very close to that of U.K. private international law. The second part of this work contains a study showing the incidence and relevance of domicile for taxation purposes. First of all, the position under UK Income Tax provisions is examined. Here it will be seen that it is in connection with income arising abroad that the domicile of an individual may be relevant. Next, the relevance of domicile in U.K. Capital Gains tax is considered. Here, the position is very similar to that obtaining under the Income tax provisions. Thirdly, domicile is dealt with in connection with United Kingdom Estate duty legislation and it is in this field that the relevance of domicile is most pronounced. In fact, if a person is domiciled in the U.K., he is liable to U.K estate duty on his world assets. The position in some foreign tax laws apart from U.K. has also been reviewed. This gives an indication of the treatment of residence and domicile in the following countries: Aden, Australia, Canada, India, France, Gibraltar, Japan and The United States of America. In the third and final chapter the position as it stands in Malta is examined, first of all as regards the “Malta Income Tax Act 1948” and secondly as regards the “Succession and Donation Ordinance of 1918”.