By David Knott, a fiduciary expert at Private Client Trust

Many people are unaware of the concept of “domicile” and few understand its implications. Domicile relates to the country where you have a permanent home, where you lay down your head each evening.

How do you acquire domicile?

At birth a legitimate child automatically acquires the domicile of its father, while illegitimate children aquire the domicile of their mother. This domicile of the parent follows the child and will change if the parent changes his or her domicile at any stage. On becoming an adult, the child is then free to adopt a new domicile of choice – for example by settling in a new country with the intention that the new address would be permanent.

It’s difficult to shake off the domicile that you acquire at birth. You would have to take definitive action to change your domicile of birth, such as renouncing your domicile of birth or settling permanently in another country with no intention of ever returning to your country of birth.

Marriage and domicile

On marriage, the wife assumes the domicile of her husband. That could even be another country that she has never even visited. She may not acquire a separate domicile of choice while still married and will also acquire any subsequent domiciles that her husband may take. Even if the wife has not settled in the country where the husband has acquired a new domicile of choice, she will also be regarded as being domiciled there. However, should she divorce her husband, she would revert back to her domicile of birth.

It’s important to note that if a man meets and marries a foreign woman while overseas (perhaps backpacking around Europe after finishing university), the marriage is actually not governed by the laws within that overseas country but rather by South African law, because the husband’s domicile is still registered as being in SA. This means that he would be married in community of property and not without community as he might have thought.

Domicile and your estate

Domicile also has an effect upon intestacy in that movables found in the intestate estate will devolve in terms of the laws of the country in which that person is domiciled. Immovable property on the other hand will devolve upon the laws of intestacy where that immovable property is situated.

For example, a person domiciled in South Africa but living in France with plans to return to SA at some stage dies without a will. Their French movables, furniture, motor car, etc, will devolve in terms of South African intestacy laws while their house in France would devolve in terms of French intestacy rules.

The amount of estate duty or inheritance tax payable on death may also depend on the domicile of the deceased. Many countries will seek to levy such tax upon the estate of anyone having been born within that country, and unless the deceased has exhibited clearly that he has renounced his domicile of birth in favour of a domicile of choice, the estate may suffer harshly.

Domicile as a concept is often the deciding factor as to the legal rights and obligations of a person, and also the capability of a court to have jurisdiction over a particular action. Domicile can be difficult to determine if an individual has not been settled for long in an area and if they still retain strong links to their birthplace.

Private Client Trust is the fiduciary services division of Private Client Holdings.