Nationality, domicile, residency, citizenship and beneficial ownership

We often find that linguistic issues can cause problems for firms looking to establish the correct withholding rate for their clients. In particular, we have seen the distinctions between nationality, citizenship, domicile, residency and beneficial ownership cause a degree of avoidable consternation.

In this post, we present a quick reference guide to each of these definitions to help you navigate this area. These are simplified definitions, intended to help you separate the terms for practical purposes, not full legal definitions. We hope you find them useful…



Nationality, often used as a synonym for citizenship, is the state of being part of a nation whether by birth or naturalization or ties to a specific nation.



Domicile is the country that a person treats as their permanent home, or lives in and has a substantial connection with. However, domicile is, in common law jurisdictions, a different legal concept to residence, though the two may often lead to the same result.



Residency can also refer to domicile and is the act of establishing or maintaining a residence in a given country despite not necessarily having citizenship.



Citizenship is the status of a person recognized under the custom or law as being a legal member of a sovereign state or belonging to a nation. In some countries, e.g. the USA and UK, nationality and citizenship can have different meanings.


Residency for Tax Purposes

Residency for tax purposes can vary considerably from jurisdiction to jurisdiction, and “residence” can be different for other, non-tax purposes. For individuals, physical presence in a jurisdiction is the main test. Some jurisdictions also determine residency of an individual by reference to a variety of other factors, such as the ownership of a home or availability of accommodation, family, and financial interests.


Beneficial Ownership

Beneficial ownership refers to anyone who enjoys the benefits of ownership of a security or property without necessarily being on the record as being the owner. Webster’s defines a beneficial owner as “one who enjoys the benefit of a property of which another is the legal owner. The legal owner (i.e., the owner on the record) may be described as the registered owner and if they are not the beneficial owner they may be described as a “nominee”.

Image Credit: Nicole Harrington


Ross McGill

Ross McGill

CEO, TConsult

Ross McGill is the CEO and subject matter expert for TConsult. Ross is a specialist in QI and FATCA operational compliance, cross border tax reclaims, relief at source and information reporting. He over 23 years of experience in financial services, including 19 years at C level; and 30 years’ senior management experience in blue chip FMCG, including sales, marketing and operations.



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