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Posted about a year ago by
Can I claim 15% Double taxation relief in UK for the NRE and NRO interest income earned in India even if no tax is applicable to be paid in India?
Posted about a year ago by HMRC Admin 19 Response
Hi,

Although NRE interest income is not taxable in India, NRE interest income has often been mistaken as non taxable in the UK, this is incorrect. UK tax residents are subject to UK taxation on their worldwide income and gains subject to any remittance basis claims. 

Under the UK-India Double Tax Convention, NRE account interest taxable in the UK can receive credit for Indian tax even if this has not been paid, as the credit relief amount is calculated through the tax spared mechanism, which deems Indian tax to have been paid at the marginal rates applicable there. You can see guidance here:

DT9553 - India: Notes

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.
 
Posted 3 months ago by melly15
Hi, I am a UK Citizen & my UK income is only £12000. If i open a NRE bank fixed cash bond in India which the interest will be tax free. Does The Savings Starter Rate which allows individuals to earn up to £5,000 in interest on their savings without being taxed be applicable to me. I will receive the bond interest payment of £2000 at the end of a financial year & remitted to a UK bank. Or is The Savings Starter Rate not applicable on foreign savings. Do i have to file a self assessment form? Thank You
Posted 3 months ago by HMRC Admin 32 Response
Hi,
Yes it still applies but as its foreign interest you still need to complete a tax return.
Thank you.
Posted 2 months ago by melly15
Hi Is this statement correct: 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. So for me who will not pay any tax in the UK because The Savings Stater Rate applies. So I will receive credit for 15% of the total interest payment of my foreign savings: e.g 15% of £2000 =£300. When filing a self assessment form. Please advise Thanks
Posted 2 months ago by HMRC Admin 17 Response

Hi ,
 
You can still claim the credit.

However as from your figures, no actual UK tax is due on the interest,

the credit would have no effect on your UK liability .

Thank you .
Posted a day ago by TimS
Dear HMRC I have accumulated around £35k interest in my NRE accounts in India. I have since transferred £5k to my UK savings account (declared interest received in UK saving account to HMRC in my self assessment). My question is 1) do I declare the balance in my NRE account to HMRC in my self assessment? 2) Do I declare my Fixed deposits in India which accumulate interest in my NRE account in India? 3) Double taxation relief - do I claim this back? If yes how ?

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