Taxes in UK for NRI
The UK tax landscape for Non-Resident Indians (NRIs) is changing dramatically with the end of the non-dom regime from April 6, 2025. This means long-term NRIs will be taxed on worldwide income, capital gains, and inheritance, not just UK assets.
Key Changes for NRIs
- Remittance Basis Ends: From April 2025, all UK tax residents (including NRIs) pay UK tax on worldwide income/gains, not just UK-sourced or remitted funds.
- 4-Year Relief: New UK residents (not UK tax resident for 10 years) get 4 years of tax-free foreign income/gains, which can be brought to the UK tax-free. After 4 years, worldwide income/gains are taxed.
- Transitional Relief: Existing non-doms can bring pre-2025 foreign income/gains to the UK at a 12% flat tax for 3 years. In 2025/26, 50% of foreign income is exempt for some.
- Inheritance Tax (IHT): After 10 years of UK residence, worldwide assets are subject to UK IHT. After leaving the UK, non-UK assets remain in scope for 10 years.
- Trusts: Trusts lose protection from April 2025. Income/gains in trusts are taxed on UK-resident settlors. Non-UK trust assets are subject to IHT if the settlor is a long-term resident.
- Non-Resident CGT: Non-residents pay CGT on all UK property/land sales. Must report and pay within 60 days. Property values are rebased to April 2015/2019.
Summary for NRIs
- New Arrivals: 4-year tax relief on foreign income/gains.
- Long-Term Residents: Prepare for worldwide taxation from April 2025.
- Estate Planning: Review trusts/assets for IHT after 10 years in the UK.
Personalized tax planning is essential for NRIs moving to or living in the UK long-term.