Income from foreign NRE account

Hello HMRC, I have received interest income about £5000 in Indian NRE account. I am not UK domiciled also I have not remitted any money to UK. Please guide if I need to pay tax on it in UK . Thanks

Hi,

You can see guidance here:

Remittance basis 2023 (HS264)

Thank you.

Dear HMRC Admin, My Domicile is India and I am UK resident for tax purposes for April'22 to April'23. I came to UK in Dec'17 and being staying here since. I do sent money regular to my India bank account (NRE) and earn interest there. Dividend is also earned there. Total is <=3000 GBP. Do I need to show foreign income details?

Can I please check if this 15% relief is applicable only to NRE interest or also NRO interest? If the NRO interest is below tax threshold in India and no tax is applicable in India, can the 15% relief be claimed in Uk?

Hi Dahood,

As non domicile, you can opt for the remittance basis. You can see guidance here:

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.


 

Hi Shivan Gupta,

Under the UK-India Double Tax Convention, NRE account interest taxable in the UK can receive credit not exceeding 15% for Indian tax even if this has not been paid.

UK tax relief not exceeding 15% is available for ten years from the opening date of the NRE account per Article 24(5) UK-India Double Tax Convention.

UK/India Double Taxation Convention  

NRE interest income should be declared within an in individuals UK self-assessment return. 

Thank you.

Hi, I would like some clarification on the tax rate on the interest that will be charged in UK on Indian NRE interest income- will this be 15% maximum even though I am a higher rate tax payer. I understand 15% tax credit will apply

Hi VFPers,
Under the UK-India Double Tax Convention, NRE account interest taxable in the UK can receive credit not exceeding 15% for Indian tax even if this has not been paid. 
UK tax relief not exceeding 15% is available for ten years from the opening date of the NRE account per Article 24(5) UK-India Double Tax Convention.                                                                            
Any excess tax that is due to be paid is dependant on your level of total income declared.
Thank you. 

Hello HMRC Admin, I am have Joint NRE account in India. I have received interest income about £12000 in Indian NRE account. I have never remitted any money to UK from India. Please guide if I need to pay tax on it in UK . Or I need to file Self Assessment . Thanks

Hello HMRC Admin, I am have Joint NRE account in India. I have received interest income about £12000 in Indian NRE account. I have never remitted any money to UK from India. Please guide if I need to pay tax on it in UK . Or I need to file Self Assessment . Thanks

Hi shankar sambhu,
If you are UK tax resident and domicile you are liable on your worldwide income and need to declare this.
If claiming the remittance basis:
Paying tax on the remittance basis (Self Assessment helpsheet HS264)
Thank you. 

Hi HMRC admin, From reading through this thread I have understood Under the UK-India Double Tax Convention, NRE account interest taxable in the UK can receive credit not exceeding 15% for Indian tax even if this has not been paid. Now on my Self assesment I have entered Country: INDIA Amount of income arising or received before any tax taken off: £1,500 Do you wish to claim foreign tax credit relief? YES Rate of tax credit relief allowed: (optional) 15% However on the final page before calculation its doing 0 Foreign tax credit relief against UK Income Tax: £ 0.00 Please advise why this is not auto calculating the figure ? it then gives me this option Would you like to use this foreign tax credit relief figure? Yes, use this figure No, I want to calculate foreign tax credit relief myself

Hi
It is possible that you are not entering a figure for tax deducted, of 15% of your NRE interest in the tax return, so that a FTCR can be calculated.  If our self assessment tax return, shown that you have not paid Indian tax, then no tax relief is due.
 

Thanks for the reply. So am I right in the below ? So in my case for example based at interest received of £1,500 /100*15=£225 I would enter the figure of £225 manually in tax deducted even though this has not been paid due to NRE account interest taxable in the UK can receive credit not exceeding 15% for Indian tax even if this has not been paid.

Hi,
Yes, that is correct.
Thankyou.

Amount of income 1500.00 Foreign tax 225.00 --- put in this as advised above Special Withholding Tax Maximum foreign tax credit relief 15% Taxable amount 1500.00 When this auto calculates it gives mes this now Foreign tax credit relief against UK Income Tax: £ 186.00 instead of £225 ? which is 12.4%? Why is it doing this ?

Hi harmzz,
Foreign tax credit relief is restricted to the level of UK tax due on the same source of income.
Thank you.

So the auto calculation figure is correct in my circumstance ? As doesnt not show anywhere how that figure is calculates so little confused

Hi harmzz

Yes the figure is correct.

Thanks

Hi I came to Uk in Sep 2023, Started working from Feb 2024. I have foreign income from interest from savings account. Do i need to pay tax on foreign income for the period April 2023-April 2024. If yes while registering for self assessment form it asks date when you started receiving foreign income. Do i mention all the previous years as I was based in Qatar prior to moving to UK. Appreciate your response.