In simple terms, it is an alternative method of taxation available to those who are resident, but not domiciled, in the United Kingdom. UK residents are normally subject to tax on all of their income and capital gains but the rules for non-domiciled residents (also known as ‘non-doms’) are different. They can opt to pay tax on the basis of their income from foreign sources and capital gains by using the figures remitted to the UK as an alternative to being taxed on the totals arising. All UK income is subject to normal taxation.

A person is usually domiciled in the country where their permanent residence is. The ‘domicile of origin’ is acquired at birth, taken traditionally from the father. This can be usurped by the ‘domicile of choice’, however, it is possible to reside in the UK for a long period of time, dependent on individual circumstances, without acquiring a domicile of choice in the United Kingdom. UK residency in this instance is automatic if the individual is in the UK for 183 or more days in the tax year.