Domicile vs Residence
Do you know the difference between domicile and residence? Or are you simply confused between the two and cannot seem to find which refers to which? There are many who live the life of an expatriate. You may think that they are domiciled in the country they are living, whereas it is only a country of residence for them. In some countries, applicants to a post need to prove their domicile in the particular state of the country, and there are countries where candidates running for elections may need to prove their domicile before being eligible to fight for elections. But all this is perhaps not making any sense till we are able to differentiate between domicile and residence. This article attempts to clarify these differences.
What does Domicile mean?
According to the Oxford English dictionary, domicile is ‘the country that a person treats as their permanent home, or lives in and has a substantial connection with.’ Domicile is the legal residence of a person. The place where a person has a fixed residence and pays taxes for this permanent home is called his domicile. But this does not mean that wherever a person resides is his domicile. The place, city, and country where one is born become his domicile. In fact, the domicile of a person is also that of his father. Domicile is an important concept in deciding the jurisdiction that applies to a person. The courts in a place have jurisdiction over citizens of that area only.
A person’s country of domicile remains his domicile for life whether or not he lives in that country. He can, however, change domicile by applying for citizenship in his country of residence, if he deems fit. However, this is not as easy as it seems, and you may not only have to fill up a form but also supply information regarding years of residence in adopted country, whether married to a local person, whether you own a property and how often and for what purpose do you visit your country of domicile.
What does Residence mean?
This is certainly not the case with residence as it is simply the place where a person is living at present. The place where a person actually lives is his residence, but it may or may not be his domicile. Knowing your domicile is important if you are an expatriate for taxation and inheritance purposes, as laws in these areas become applicable, depending upon your domicile.
If it is still not clear, assume that you are an Australian living abroad, and generating some income. This income is exempt from income tax in Australia, if you have earned it in duration of more than a year. The same rule applies to a citizen of UK, but if you are a US national, you have to pay income tax on income generated abroad. Thus, it is prudent to know your tax liability in your country of domicile if you have earned something from your country of residence.
In another context, residence is also used to refer to the official home of a government minister or other public or official figures. For example,
We went to the residence of the Minister of Education for the meeting.
Here, residence refers to the official home of the Minister of Education.
What is the difference between Domicile and Residence?
• Domicile and residence seem to be the same for someone who has not moved out of his ancestral place of birth; though for an expatriate, the place where he is actually living is his residence, whereas domicile remains his place of birth, which is decided at the time of his birth.
• Domicile is an important concept for legal purposes as taxes and laws of inheritance of the country of domicile are applicable on him.
• Residence simply refers to a place one lives.
• One can change one’s domicile by applying for citizenship in another country.
• Residence is also used to refer to the official home of a government minister or other public or official figures.