Celeste is keen to move quickly and wants to sell the property as soon as possible, but she has concerns whether a sale is possible without any agreements in place.

To complicate things further, Celeste has two children from this marriage, aged 8 and 16, and would like them both to join her in France. Henry is keen to support both Celeste and her children but wants to assure himself that he is capable of doing so. Therefore, before finalising their plans Henry wants to confirm if moving to France and gaining a non-dom status will have any financial implications.

To ensure they fully understand the potential impact of moving to France could have on their family and their finances, what advice should Henry & Celeste seek before they make the move?

The term parental responsibility is defined under the Children Act 1989 as “all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property”. It can be granted in several ways both to biological parents or to a person whom the child is not biologically linked.

If for example, the other biological parent(s) of Celeste’s children are registered on their birth certificate(s) then they would hold joint parental responsibility with her, and it follows that she would need to consult them about the intended relocation. Without consent of the other ‘PR’ holder then Celeste would need to obtain an order from the court granting permission for the relocation, instead. If she were to remove the children from the jurisdiction without either the consent or court order, then she might fall into the realm of ‘child abduction’ which can be a criminal offence.

The law surrounding international relocation is very specialist and so it is important that Celeste seeks legal advice. Decisions on applications for relocation are often finely balanced and can take several months for the court to deal with, so it is also advisable for her to engage that specialist at the earliest opportunity.

What could impact a court’s decision to permit you moving your children abroad?

Ultimately, the court’s paramount consideration will be the welfare of the children. They will have regard to the welfare checklist under the Children Act 1989 which includes non-exhaustively: the effect of any change in circumstances for the children, their physical, emotional and educational needs as well as in some cases, their ascertainable wishes and feelings which will be considered in light of their ages and understanding.

It will be important for Celeste to show why the move would be in the best interests of the children and how it would still be possible for the children to maintain a healthy relationship with their other parent. Case law in this area has developed over the years to consider the impact on that loss of relationship as having considerable weight and generally, also taking precedence over the impact of refusal on the applicant parent.

We know that Celeste’s plans for relocation are in the early stages, and she is also going through divorce with financial agreements yet to be reached. Her intentions for housing (be that within the UK or internationally) will likely play a key consideration as part of the discussions around a resolution on finances, and there may be several other resulting consequences that are also key considerations in those negotiations. It is therefore helpful that she is anticipating these now so that all elements can be carefully managed, considering them individually but also holistically.

Celeste will need to take account of advice both on the likely success in an application for permission to relocate the children to France (assuming consent cannot be obtained) but also how that change might alter her position for financial separation before deciding what to do. She should consider these alongside other impacts as the result of change in her own immigration status and the timeframe in which she would like the move to happen.

More from Family Solicitor-Advocate, George Chick

However, on their move to France, Henry is wondering whether to negotiate with his current employer to remain in his current position but working mostly remotely, or whether to seek employment with a French company. He also wishes to be clear about how and where his assets would be taxed on his death.

Henry was born in England to UK domiciled parents so his “domicile of origin” is the UK and will always be so. When he and Celeste move to France, if he decides that he is making France his permanent home, known as a settled intent to remain, he will adopt a domicile of choice of France. However, as a former UK resident and being formerly domiciled in the UK, Henry will still be treated as, or “deemed”, domiciled in the UK for some time after he has settled in France. Whether or not Henry was deemed UK domiciled at the time of his death would normally have an effect on how his estate would be taxed in the UK on his death, but because the UK and France negotiated their Double Taxation Convention prior to 1975, the UK deemed domicile provisions will not apply Henry’s estate if he is actually domiciled in France at his death. In these circumstances, and provided Henry has not made an election under the EU succession regulations for English succession law to apply to his estate, only his UK assets would be taxable to UK inheritance tax on his death.  However, as a French resident, his worldwide estate (including his assets in the UK) would be taxable in France, but with credit given for the inheritance tax paid in the UK.

What are the tax rules for someone who is a formerly domiciled resident?

As someone who was both born in the UK and acquired a UK domicile of origin at birth, on leaving the UK, Henry will be classed as a “formerly domiciled resident” and the rules regarding re-acquisition of UK domicile are different to those affecting someone who is not a formerly domiciled resident.  For example, if Henry returns to the UK in the future, as a formerly domiciled resident, he will be treated as UK domiciled for income tax and capital gains tax purposes as soon as he is UK resident and will not be able to claim the remittance basis of taxation in relation to any foreign income or capital gains he may make after his return to the UK.

How are you taxed if you work in the UK but live abroad?

In terms of work, if Henry and his current employer agree that he can continue with his present job, working remotely in France but returning periodically to the UK, Henry should ensure that he is familiar with the UK statutory residence test in order to be certain whether or not he will be treated as being UK resident in any particular tax year.  He will be treated as resident in the UK in any tax year where he meets either the automatic UK residence test or the sufficient ties test.  If Henry wanted to avoid meeting the automatic UK residence test, one of the ways he could do this would be to meet the automatic overseas residence test, for example, by ensuring that he worked sufficient hours outside of the UK, without any significant breaks, to reach an average of 35 hours worked outside of the UK per week and that he worked for no more than 30 days in the UK and spent no more than 90 days in the UK during the tax year. To prevent complexities with their payroll, however, Henry’s employer may prefer that Henry is treated as UK resident in relation to income tax rather than resident in France.

More from Private Client Associate, Jan Tyley