Concerns rise among NRIs, new migrants over impending UK tax reforms
tax system, hangs over many non-resident Indians (NRIs), recent migrants, and families who are planning to make the UK their new home.
The new tax order, expected to take effect in April 2025, would increase their tax burden, require meticulous planning, and may even make the UK a less attractive country to migrate.
Think you check all the immigration boxes? Find out
Over the past one month, tax experts and lawyers have been visiting London, exchanging notes with their City counterparts, to find ways to soften the blow.
The Extra Tax
(Join our ETNRI WhatsApp channel for all the latest updates)
The trigger is the UK’s spring budget proposal to end the current tax treatment for UK resident non-domiciled (non-doms) individuals. Under the current tax regime, Indian income and capital gains of NRIs are not taxed unless remitted to the UK. This treatment can be availed for the first 15 years, after which an individual is deemed to be domiciled and the entire global income is taxed in the UK.
But, under the proposed regime, new arrivals in the UK will not be subject to tax on their foreign income (irrespective of whether it is remitted to the UK) only during the first four years, starting with the year in which the individual becomes a resident. From the fifth year onwards, UK residents will be taxed on their worldwide income — like earnings from rent, bank FDs, and stocks in India. NRIs who had migrated say 2 years ago and are presumably non-doms, would be able to claim tax relief on foreign income for the
