Tax Type
Individual Income Tax
Description
Change of domicile; Part-year returns
Topic
Residency
Date Issued
04-30-1985
April 30, 1985
Re: Ruling Request/Individual Income Tax
Dear ****
This responds to your request for a ruling regarding the domiciliary status of your clients, ***** from July 1, 1980 to January 31 1983. You asked for separate rulings with respect to *****, however, we feel that since the same facts are applicable to both taxpayers, this ruling shall be binding on both.
FACTS
***** (hereinafter "Husband") and ***** (hereinafter "Wife") maintained a place of abode in Virginia from September 1972 until June 1980. In April 1980, Husband changed employers and accepted a position in London, England. This was a permanent position with no contract limiting his term of employment. Husband, age 55 at the time that he accepted the position, planned to continue in the position until he retired.
Husband spent approximately half of his time between April and June working and living in London and the other half of his time during that period living and working in Virginia. In June 1980, the taxpayers decided to take advantage of the one year rental allowance provided by Husband's employer and rented a townhouse in London. They planned to Purchase a home in London before the expiration of the one year lease.
In July 1980, Wife and the youngest child joined Husband in London. The taxpayers moved all of their personal and household property from their house in Virginia. They shipped some items to London and placed the rest in storage, in anticipation of purchasing a house in London. They retained their house in Virginia for investment purposes. It was occupied at various times during the period in question by the taxpayers' emancipated children, who continued to reside in Virginia.
The taxpayers disposed of both of their Virginia registered vehicles when they moved to London. They bought a car in London which was registered there and Wife obtained an international driver's license. Because of a medical condition Husband was unable to drive, so he did not obtain a foreign driver's license. Additionally, the taxpayers opened bank accounts in London, became members of the American Church in London, received diplomatic cards and met all requirements for residency in England on a permanent basis. Before the expiration of the one year lease the taxpayers attempted to purchase a home, but found that the cost was prohibitive; therefore, they renewed their lease on the townhouse.
Due to a medical condition, Husband was forced to retire prematurely. The taxpayers moved from London to their former home in Virginia in January 1983.
RULING
Virginia Code Section 58.1-302, defines the term "resident," for purposes of determining liability under the Virginia income tax, to include "every person domiciled in Virginia at any time during the taxable year . . ." Section 58.1-303 provides in part:
"Any person who, on or before the last day of the taxable year, changes his place of abode to a place without the Commonwealth with the bona fide intention of continuing actually to abide permanently without Virginia, shall be taxable as a resident for only that portion of the taxable year during which he was a resident of Virginia . . . ."
These sections provide that a person is not a Virginia domiciliary if: (1) he has changed his place of abode to a place without Virginia and (2) he intends to continue to actually and permanently abode without Virginia. These statutory requirements have not altered the exhaustive consideration and analysis of domicile offered in numerous Virginia cases. Talley v. Com., 127 Va. 516, 103 S.E. 612 (1920); State-Planters Bank v. Com., 174 Va. 289, 6 S.E.2d 629 (1940); and Layton v. Pribble, 200 Va. 405, 105 S.E.2d 864 (1958).
Enunciated in the foregoing cases is the legal principle that in order for one to change a legal domicile from one place to another, one must abandon the former domicile and acquire a new legal domicile in another place. Further, the cases make clear that to effect a change of domicile, there must be (1) an actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The intent of the person, often being the question, must frequently be determined from the declaration and conduct of the person, in the light of the attending circumstances, State-Planters Bank v. Com., supra.
It appears from all of the facts and circumstances that both Husband and Wife met the tests for a change of domicile by July 1, 1980. They (1) changed their place of abode to a place without Virginia and (2) had the intention at the time they moved from Virginia to permanently abide without Virginia.
Taxpayers shall file as part-year residents of Virginia for 1980 and 1983, based on the dates that they moved out of and into Virginia. They are not required to file a Virginia resident income tax return for taxable years 1981 and 1982.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Ruling Request/Individual Income Tax
Dear ****
This responds to your request for a ruling regarding the domiciliary status of your clients, ***** from July 1, 1980 to January 31 1983. You asked for separate rulings with respect to *****, however, we feel that since the same facts are applicable to both taxpayers, this ruling shall be binding on both.
FACTS
***** (hereinafter "Husband") and ***** (hereinafter "Wife") maintained a place of abode in Virginia from September 1972 until June 1980. In April 1980, Husband changed employers and accepted a position in London, England. This was a permanent position with no contract limiting his term of employment. Husband, age 55 at the time that he accepted the position, planned to continue in the position until he retired.
Husband spent approximately half of his time between April and June working and living in London and the other half of his time during that period living and working in Virginia. In June 1980, the taxpayers decided to take advantage of the one year rental allowance provided by Husband's employer and rented a townhouse in London. They planned to Purchase a home in London before the expiration of the one year lease.
In July 1980, Wife and the youngest child joined Husband in London. The taxpayers moved all of their personal and household property from their house in Virginia. They shipped some items to London and placed the rest in storage, in anticipation of purchasing a house in London. They retained their house in Virginia for investment purposes. It was occupied at various times during the period in question by the taxpayers' emancipated children, who continued to reside in Virginia.
The taxpayers disposed of both of their Virginia registered vehicles when they moved to London. They bought a car in London which was registered there and Wife obtained an international driver's license. Because of a medical condition Husband was unable to drive, so he did not obtain a foreign driver's license. Additionally, the taxpayers opened bank accounts in London, became members of the American Church in London, received diplomatic cards and met all requirements for residency in England on a permanent basis. Before the expiration of the one year lease the taxpayers attempted to purchase a home, but found that the cost was prohibitive; therefore, they renewed their lease on the townhouse.
Due to a medical condition, Husband was forced to retire prematurely. The taxpayers moved from London to their former home in Virginia in January 1983.
RULING
Virginia Code Section 58.1-302, defines the term "resident," for purposes of determining liability under the Virginia income tax, to include "every person domiciled in Virginia at any time during the taxable year . . ." Section 58.1-303 provides in part:
"Any person who, on or before the last day of the taxable year, changes his place of abode to a place without the Commonwealth with the bona fide intention of continuing actually to abide permanently without Virginia, shall be taxable as a resident for only that portion of the taxable year during which he was a resident of Virginia . . . ."
These sections provide that a person is not a Virginia domiciliary if: (1) he has changed his place of abode to a place without Virginia and (2) he intends to continue to actually and permanently abode without Virginia. These statutory requirements have not altered the exhaustive consideration and analysis of domicile offered in numerous Virginia cases. Talley v. Com., 127 Va. 516, 103 S.E. 612 (1920); State-Planters Bank v. Com., 174 Va. 289, 6 S.E.2d 629 (1940); and Layton v. Pribble, 200 Va. 405, 105 S.E.2d 864 (1958).
Enunciated in the foregoing cases is the legal principle that in order for one to change a legal domicile from one place to another, one must abandon the former domicile and acquire a new legal domicile in another place. Further, the cases make clear that to effect a change of domicile, there must be (1) an actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The intent of the person, often being the question, must frequently be determined from the declaration and conduct of the person, in the light of the attending circumstances, State-Planters Bank v. Com., supra.
It appears from all of the facts and circumstances that both Husband and Wife met the tests for a change of domicile by July 1, 1980. They (1) changed their place of abode to a place without Virginia and (2) had the intention at the time they moved from Virginia to permanently abide without Virginia.
Taxpayers shall file as part-year residents of Virginia for 1980 and 1983, based on the dates that they moved out of and into Virginia. They are not required to file a Virginia resident income tax return for taxable years 1981 and 1982.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner