What changed in 2026
- Trade agreement in force: the India–UK CETA took effect on 15 July 2026, cutting tariffs on most goods traded between the two countries.
- Social security: the UK–India Double Contributions Convention also came into force on 15 July 2026, so employees sent temporarily between the two countries can stay in their home social-security system for a limited period instead of paying in both. Check the current time limit on gov.uk before you second staff.
UK–India tax essentials
| Payment from India to the UK | Treaty rate cap |
|---|---|
| Dividends | 10% (15% in specified property cases) |
| Interest | 10% (financial institutions) or 15% |
| Royalties and fees for technical services | 10% or 15%, depending on the type |
An Indian subsidiary of a UK company can opt for India’s 22% base corporate rate (about 25.17% with surcharge and cess). Charges between the two companies must be at arm’s length.
How we help
- Indian subsidiary, LLP or branch — structure, incorporation and FDI reporting.
- Captive centres (GCCs) — cost-plus pricing, GST on exported services and hiring.
- Monthly books, payroll, GST and reporting to the UK parent through a Virtual CFO engagement.
Doing business in India from abroad?
Need anything done in India — checks, research, filings, tax or accounting? Your team on the ground in India.
Due diligence in IndiaFinancial, tax and FEMA due diligence on Indian companies for foreign investors and acquirers.Indian subsidiary complianceAccounting, tax, FEMA and ROC compliance for Indian subsidiaries — reported to the parent.India tax for foreign companiesWithholding, treaty relief (TRC, Form 41), PAN, PE reviews, returns and GST for foreign suppliers.India market entry researchFeasibility, regulatory mapping, cost and tax models, and partner research from public filings.
Frequently asked questions
Is the UK–India trade deal in force?
Yes. The India–UK Comprehensive Economic and Trade Agreement entered into force on 15 July 2026, together with the Double Contributions Convention on social security.
How does a UK company set up in India?
Usually through a wholly owned Indian private limited subsidiary under the automatic FDI route, with a resident director, FC-GPR reporting within 30 days of issuing shares, and transfer pricing for intercompany charges.
What withholding tax applies to dividends from India to the UK?
The India–UK tax treaty caps Indian tax on dividends at 10%, or 15% in specified cases involving income from immovable property, subject to treaty conditions.