NRIs : tax considerations

NRIs may seek a ruling from HMRC regarding their “domicile” position but they must have sources of income or gains abroad in order for the application to be “relevant”.  Simply ticking the non-domicile box on the tax return may have adverse tax consequences so do take advice before any action is taken. 

NRIs should also refer to the relevant articles of the India-UK double taxation agreement (DTA) and other agreements to investigate issues such as the extended definition of domicile for inheritance tax purposes, treaty override provisions of UK domestic law and they should also take tax and legal advice in India regarding their inheritance and wealth tax position under Indian law. 

There are special provisions in Indian tax law regarding “Hindu Undivided Families” (HUF) and if some members live in the UK and others in India with regular travelling or business connections then these considerations may be relevant in tax planning arrangements.