Tax rule while transferring money from India to UK

I am working here in the UK and holding a Skilled worker visa at the moment. Do I need to pay any tax for the below scenarios? If yes, then I would like to the UK tax rules/processes which I have to follow (if there is any) while transferring money from India to the UK via online money transfer sites. Also would like to know if there is any slab or upper limit or something else. Source of funds are as below, Scenario 1 :- Money is earned in the UK (from salary and paid the tax for the same) and sent to India. Now I want it back here in the UK. Scenario 2 :- Provident Fund (received in India) received from my previous employer. Already paid the tax in India. Scenario 3 :- Gifted/inherited money from parents(in India). Want to send it to the UK. Thanks in advance.

Hi,
 

There are no income tax implications on the transfer of money from the UK. If you are UK resident then you will be paying tax in the UK on any income earned. You will only need to pay income tax on income from India that is transferred to the UK if previously you have claimed the remittance basis on this income. As a UK resident, you will need to report your worldwide income to the UK unless you are claiming the remittance basis.

Thank you.

Dear Team Apologies as I am not clear on this. similar queries, 1. Do I need to pay tax if it's my own personal savings which I want to transfer from india to uk? 2. Do I need to pay tax if my parents transfer money to me as gift from india to uk? Apologies for the inconvenience and thanks in advance.

Hi,

You only need to pay tax on the transfer if you have claimed the remittance basis on any of this income in the past. If this income was earned while UK tax resident then it should have been

reported already. There are no income tax implications on the transfer of money as a gift from parents. 

Thank you.
 

Hi I am working here in the UK and holding a Skilled worker visa at the moment. Do I need to pay any tax for the below scenario: I have been working in UK for the past 5 years and over the years I've sent money back home to india. Now, I am planning to get the same money back, do I have to pay any tax on it again or declare it etc? Thanks

Hi,

You can see guidance here:

Tax on foreign income

Thank you.

Hi, I have been working in UK for the past 6 years and also have acquired British Citizenship. From my savings in the UK, over the years I've sent money back home to India and will be doing that in the future. Going forwards, at some point if I decide to get back the same amount of money to the UK which I have transferred in past years to India, do I have to pay any tax on it again or declare this remittance anywhere? The money originally transferred from UK to India was post tax savings amount. Please advise. Kind Regards,

Hi,

There wont be any tax to pay on the actual capital that you transfer.

You will have to declare any interest or dividends that this then generates whether it is in India or the UK.

Thank you.

Hi, I am a Dutch and Indian resident in the UK and want to sell an inherited property in India. Do I have to pay tax in India, the UK or both? Should I then transfer the money from an Indian bank account into an English one or is there a better way to declare a check directly into my English account? Again, should I pay tax over this amount and in which way? Thank you.

Hi team, From what I understand from HMRC guidance on remitted basis is that if the unremitted income / gains are less than £2,000 in a tax year, nothing needs to be done if one is non-domiciled resident in UK. Guidance below: "Tax if you’re non-domiciled You do not pay UK tax on your foreign income or gains if both the following apply: they’re less than £2,000 in the tax year you do not bring them into the UK, for example by transferring them to a UK bank account If this applies to you, you do not need to do anything." If I am filing a self assessment because of other reasons, can I then just ignore this income, which is less than £2,000, say £500? If yes, what happens to this £500 if my domicile changes to UK next year and i) I remit this income to UK or ii) I do not remit this income to UK?

Hi Neisha Kaul,

You may be liable to Capital Gains Tax in both countries. If you are resident and domiciled or deemed domiciled in the UK, then you may be liable to capital gains tax in the UK, on the disposal of the property in India. Have a look at the residence, domicile and remittance basis, to determine your position.  

RDR3 Statutory Residence Test  

There is also a capital gains calculator at:

Capital Gains Tax: what you pay it on, rates and allowances  

You will need to convert a figures to UK pounds sterling to work out if there is any tax to pay.

Thank you.

Hi Shivam Gupta,

You can see further guidance hee:

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

Thank you.

Hi Team, I moved to the UK in skilled worker visa and started working In a permanent job under my sponsor employer in the UK from October 2022. Before moving to the UK, I was working in India and I have some savings in my Indian bank account. These are savings after the taxes I paid in India and income source was salary from my Indian employer while I was working in India before moving to the UK. Could you please tell me if I transfer my savings from my Indian salary I have now in my Indian account to my UK bank account that I opened after moving to the UK, do I need to pay tax again on the transferred amount here in the UK. I would like to transfer my savings for my and my family’s living expenses in the UK and also for paying the deposit in future for buying a home here in the UK. Kindly advise. Thanks Jithin

Hi,
 

You do not need to pay tax on the actual capital that you transfer. If this then generates any interest or dividends once you deposit it in the bank, the income it generates is liable to tax . Thank you.

Hello there, I've been in the UK on a spouse visa for the past 2.5 years, working and paying taxes on my earnings. I am planning to sell my flat in India and would like to transfer the money to the UK for a deposit on a new house. Since I will be paying tax in India on the sale of my flat, will I still have to pay tax on the money transferred over here, which will be approximately £30,000?

Hi,

There are no UK Income Tax implications regarding the transfer of money from an overseas account to a UK bank account. Any interest that accrues may however be taxable. You can see more information here:                                           

Tax on savings interest

Thank you.

I am inheriting property from my parents in India , which I am then looking to sell . Do I have to pay IHT or any tax in UK after I pay tax in India ? Is there a threshold which is tax free on the money got from the sale?

Hi,

If you are resident and domiciled or deemed domiciled in the UK, then you will need to work out if there is any Capital Gains Tax to pay. You would need to convert the market value of the property at the time you inherit it, into pounds sterling, using the official exchange rate at the time. 

Exchange rates from HMRC in CSV and XML format 

You would then do the same at the time of disposal, including costs, to work out if there is a gain or loss. A gain will need to be reported in a Self Assessment Tax Return, where you can clim tax relief on tax paid in india. If you are resident and not domiciled and do not bring the money into the UK, you can elect to use the remittance basis. 

Tax on foreign income 

More information on residence, domicile and remittance can be found at:

Residence, domicile and the remittance basis: RDR1

Thank you.
 

Hi Team- I have a similar query as above. I have been in the UK for last 4-5 years and have been sending money to India from my UK post tax savings. 1. Are there any tax implications or tax payment if I bring back the amount from India into the UK using any of the online money transfer sites? 2, Does it require any declaration to be made in Self Assessment because it is the same money that I already paid the tax and then sent to India from my savings? 3, Also can I use the money to buy any property within the UK as an initial deposit for housing mortgage? Hope I can show the source of funds as from home country in case of any questions on the initial deposit during mortgage process?

Hi,

1. If you income has already had tax deducted when it is moved outside the UK, it will only be any interest arising on this capital that would be subject to tax.  
    
2. No declaration is required as tax was already paid on it. Income arising from it would be taxable.  
    
3. Yes.

Thank you.