Domicile

Ability-To-Pay Taxation

What is a home?

Your home is where you maintain permanent residence. Your intention to stay in this place indefinitely makes it your home and makes you home. Your domiciled status subjects you to specific laws. Thus, the domicile is a legal construct used to determine where you vote, file lawsuits, pay taxes, claim benefits and compel government authority.

Key points to remember

  • Home usually refers to where you permanently call your home.
  • Your home is important for legal purposes such as paying taxes, voting, and requesting benefits.
  • Residence and domicile differ legally mainly in the duration of your stay in a specific place.

Understanding the home

At birth, your place of origin is the accommodation that you share with your parents. This location remains your home until you reach the age of majority and acquire a preferred home. This domicile of choice remains your domicile until you abandon it by moving to a new domicile with the good faith intention of making the new domicile your permanent and permanent domicile.

No matter how many houses you own, only one is your home. It is the one you acquire with the intention of staying indefinitely and towards which you move after having abandoned your old home. It can be the house where you live, work, bank, vote and register your car.

Residence and domicile are not identical and have different legal meanings.

Residence vs domicile

You may have heard the residence and the domicile used interchangeably to designate your house. However, the terms “residence” and “domicile” have separate legal meanings. The determining factor between the two words is the length of your stay.

A residence is a dwelling in which you plan to live temporarily, while a domicile is a dwelling in which you plan to live for an indefinite period. Any place you own or live in during a prohibited period can be your home. But only the site where you intend to make your permanent residence and stay indefinitely can be your home. So you can have many residences in many places, but you can only have one home in one place.

Your home is also your home, but your home may or may not be your home.

Choose your home

If you always have a home and never have more than one, then where is your home if you also live in two units? Suppose, after many years of living in Maine and vacationing in Florida, you now live half the year in Maine where you file taxes and make a will, and you live the other half of the year in Florida where you vote and register your car. Is your home in Maine or Florida?

The uniform distribution of your essential activities between Maine and Florida indicates that you did not intend to abandon Maine when you acquired Florida. Therefore, Maine is your residence and your domicile, and Florida is your residence but not your domicile.

You cannot change your domicile by simply filing a declaration of domicile in another country or state. Instead, your lifestyle should correspond to a permanent change of domicile. Your intended home can be deducted from where you live and spend time.

Legally, your home is the place you declare in legal documents, such as the address you use for voting, banking, registering vehicles and paying taxes. Ending a home association includes your efforts to close bank accounts, surrender your driver’s license, remove your name from the voters list, and pay taxes as a non-resident.

Legal consequences of domiciles

Your home has legal consequences. It defines the country, the state and the courts competent to approve wills, administer estates, judge legal actions and assess income and death taxes. After a divorce, legal domicile may affect your ability to request and control the payment of child support and child support.

It affects how, when and on what income you pay state taxes. Residing in a country or state limits the scope of the tax authorities to the income tax you earn within its borders. Often, high income taxpayers have their domicile in a state that has the lowest tax to pay for them.

Death tax is imposed by the country or state of domicile. Depending on your indicated domicile and that of your beneficiaries, the inheritance tax implications can be radically different. The home can extend its reach to all of your income from any source in the world. However, indices of residence, such as owning real estate, or indices of domicile, such as failing to properly abandon your former home, may subject you to taxes in more than one state.

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