"I have income in both India and the UK - how do I make sure I'm not taxed twice?"
It starts with where you are tax resident
Which country can tax you, and on what, depends mainly on residence. If you are UK resident, the UK generally taxes your worldwide income and gains. If you are not UK resident, the UK generally taxes only your UK income, such as rent from UK property. India runs its own residence test, separate from the UK's, so you can be resident in one country, in both, or in neither.
There is one important exception. If you have recently become UK resident after a period abroad, the foreign income and gains (FIG) regime can relieve qualifying overseas income and gains for your first four years. This is a claim made on your Self Assessment return.
What the UK-India tax treaty does, and what it doesn't
The treaty between the UK and India sets out which country has the main right to tax different kinds of income and provides relief where both do. Where both countries tax the same income, one gives a credit for the tax paid in the other. In the UK, that credit is claimed through the foreign pages of your Self Assessment return.
It allocates taxing rights between the two countries, provides credit relief, and includes a tiebreaker if you are treated as resident in both.
You have to claim the relief, in the right country, with the right figures. If you do not claim it, you can end up paying more than you need to.
Why both sides need to agree
Most double-tax problems are not caused by the treaty. They arise because two advisors each look at half the picture.
A common example is rental income from a property in India. It is reported in India and, for a UK resident, also in the UK. The Indian tax paid then has to be matched against the UK liability. If the figures, dates or currency conversions differ between the two returns, the credit can be reduced, delayed or questioned.
The same applies to UK property owned by someone living in India. Letting agents or tenants may have to deduct basic-rate tax from the rent unless HMRC approves you to receive it gross. That scheme only collects the tax. You must still file a UK return, and your position in India has to be consistent with it.
This is why we take care of both sides. The UK work is handled by Metta Accountants and the India work by our partner firm, Metta Accountants India, as two separate engagements, with the teams working together so that your UK and Indian positions line up.
Further Reading
Not sure where you stand?
Book a free UK-India tax call and we will talk through both sides.
Metta Accountants - UK Tax Specialists · Harrow, London
Frequently Asked Questions
Do NRIs pay UK tax on their Indian income?
It depends on whether you are UK resident. UK residents are generally taxed on worldwide income, subject to reliefs such as foreign tax credits and, for recent arrivals, the foreign income and gains regime. Non-residents are generally taxed in the UK only on UK income.
Does the UK-India tax treaty mean I pay no tax in one country?
Not automatically. The treaty decides which country has the main right to tax and provides credit for tax paid in the other. The relief has to be claimed correctly, and the credit is generally limited to the UK tax due on that income.
I own UK property but live in India. What do I need to do?
You will usually need to report your UK rental profit and pay UK tax on it. Your letting agent or tenant may need to deduct tax unless you are approved to receive the rent gross. You must still file a UK return, and your Indian reporting should be consistent with it.
I have just moved to the UK from India. Where do I start?
Start by confirming your UK residence status and the date it began. Then check whether the foreign income and gains regime applies to you, what must be reported in each country, and make sure relief is claimed on both sides.
Suyesh Sharma
Founder & FCCA
Helping high earners and business owners keep more of what they earn through strategic planning.
