What are the taxation rules for NRE FD if I transfer my GBP funds to my spouse. We both are living in the UK.
As I understand, NRE FD while tax free in India is liable for taxation as global income when filing self assessment in UK.
As I am a high rate tax payer, is it allowed for me to transfer my GBP earnings to my spouse and she can open NRE FD in their name. As my spouse is a basic rate tax payer, they will be liable to lesser taxation on the NRE interest. Effectively we are looking at this as a tax saving option.
My specific queries are:
- Is the above allowed? i.e sending GBP funds to spouse and they investing and paying taxes as per their tax rate
- Is there any limit on the funds I can transfer to my spouse?
- Is there any limit on the NRE FD deposits?