- NRE interest is exempt in India but generally taxable in the UK.
- Indian mutual funds can fall under UK offshore fund rules — gains taxed as income.
- Use an HMRC certificate of residence + Form 41 for treaty rates; claim foreign tax credit relief in the UK.
Income by income: India vs the UK
| Income or asset | India | UK (residents) | Watch out |
|---|---|---|---|
| NRO interest | Taxed; bank deducts TDS (30% plus surcharge and cess by default) | Taxable for UK residents; foreign tax credit relief | Treaty reduces Indian tax with an HMRC certificate of residence and Form 41 |
| NRE / FCNR interest | Exempt while you are an NRI | Taxable for UK residents (unless covered by the FIG regime) | Often missed on UK returns |
| Dividends from Indian shares | Taxed in India; treaty caps it at 10% in most cases | Taxable; credit for Indian tax | Claim the treaty rate rather than the 20% domestic rate |
| Sale of Indian property | Capital gains tax; buyer deducts TDS | Taxable for UK residents; credit for Indian tax | Lower-TDS certificate (Form 128) avoids over-deduction |
| Indian mutual funds | Capital gains tax in India | Offshore fund rules — gains on non-reporting funds taxed as income | Check reporting-fund status before investing |
| Rent from Indian property | Taxed; tenant may deduct TDS | Taxable; credit for Indian tax | File an Indian return to claim deductions |
The UK’s FIG regime (from April 2025)
From 6 April 2025 the UK replaced the old remittance basis for non-domiciled residents with a four-year foreign income and gains (FIG) regime for people arriving after ten years of non-residence. Within those four years, qualifying foreign income and gains can be exempt from UK tax if claimed; after that, worldwide income is taxed. If you moved to the UK recently, check whether you qualify before reporting Indian income.
Avoiding double tax
- In India: claim the India–UK treaty rate (for example a 10% cap on dividends in most cases) by giving the payer an HMRC certificate of residence and Form 41.
- In the UK: claim foreign tax credit relief for Indian tax paid on the same income on your Self Assessment return.
- File an Indian return to recover excess TDS — see NRI income tax return.
Which country are you resident in?
India uses day counts (182 days, or 60 days plus 365 days over four years, with special rules for visiting NRIs) — see residential status and RNOR. The UK uses its Statutory Residence Test. You can be resident in both in a year; the treaty’s tie-breaker rules then decide where you are treated as resident for treaty purposes.
How we help
We handle the Indian side — returns, TDS refunds, lower-TDS certificates, property sales and repatriation — and work with your UK accountant so both returns agree. See NRI tax services and India advisory for clients in the UK.
Sources
- GOV.UK — Tax on foreign income
- GOV.UK — Get a certificate of residence
- GOV.UK — Offshore funds: list of reporting funds
Frequently asked questions
Is NRE interest taxable in the UK?
How are Indian mutual funds taxed for UK residents?
How do NRIs in the UK claim India–UK treaty rates?
What replaced the UK remittance basis?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.