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Posted Sun, 15 Jan 2023 21:21:48 GMT by rlmpavsm
I am an Indian National; and for the last 6 years a UK resident. I hold a "Non-Resident Ordinary (NRO)" savings account in India and have an interest income of around £5000. I am a non-domicile in the UK and am not planning to repatriate this money to the UK at any time in the future. Here in UK I have a PAYE income from my employer and I am in the basic tax slab of 20%. In India, the first £4000 of this NRO interest income is exempted and the rest (£1000 ) is considered taxable income in India and hence i paid tax for the rest of the money. I have the following query 1) How much of my foreign income should i show in my UK Self assessment tax return, full £5000 or only £1000 (which is considered taxable income in India) 2) If in case i have to show full £5000, will i get tax exemption for the first £2000 ? Because i was told that HMRC exempts tax from the foreign income of up to £2000 3) If in case i have to show full £5000 and i won't get the exemption for the first £2000; will i be able to at least claim the foreign tax credit for the £4000 exemption provided by India, that will allow me to claim 15% tax credit for this portion of Income Looking forward to your kind clarification Thanks, Warm Regards, rlmpavsm
Posted Thu, 19 Jan 2023 14:52:05 GMT by HMRC Admin 32

Please refer to guidance at

Tax on foreign income

Thank you.
Posted Sat, 21 Jan 2023 11:13:37 GMT by rlmpavsm
Dear HMRC Team, Thanks for your revert. I went through the "Foreign income page". While i got clarity on some of the point, the following aspect is still not clear, can you pls help * Is NRO income eligible for tax sparing clause (Wherein i can deduct 15% straight away, irrespective of whether Indian government has deducted tax or not) Thanks Warm Regards, rlmpavsm
Posted Tue, 24 Jan 2023 14:02:28 GMT by HMRC Admin 17

Non Resident Ordianry interest is taxable in the UK. 

The rules for tax on savings interest woud apply to foreign interest as well. 

When converted to pounds sterling and added to UK interest, the rules at :

Tax on savings interest   ,

will help determine how much is taxable.

Thank you.

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