UK-India DTAA Guide

If you're a UK tax resident with India-source income, DTAA relief runs through two separate systems. India needs proof you're a UK tax resident before it will apply a reduced rate. The UK, separately, needs you to correctly claim credit for tax you already paid in India, generally through a mechanism called Foreign Tax Credit Relief rather than a US-style foreign tax credit form. Miss either side and you can end up paying more than the treaty intends.

Getting your UK residency certified for India: the Certificate of Residence

To claim DTAA benefits in India, India wants proof you're a UK tax resident. HMRC provides this as a Certificate of Residence, requested through an online digital form (individuals and sole traders), through a tax agent acting on your behalf, or by post as a fallback.

• State clearly on the request that the certificate is needed to claim double taxation relief under the UK-India treaty.
• HMRC's published guidance does not state a fixed processing time or a fee for this service. Apply well ahead of any deadline rather than assuming a specific turnaround.
• Once issued, the certificate serves the same role in India's process as a Tax Residency Certificate from any other country: it pairs with India's own Form 41 self-declaration to unlock the treaty rate.

Claiming credit for Indian tax: Foreign Tax Credit Relief on SA106

If you're a UK tax resident paying Indian tax on India-source income, you generally claim Foreign Tax Credit Relief (FTCR) on the SA106 foreign income supplementary pages of your Self Assessment return: interest and other overseas savings go in one set of boxes, foreign dividends in another, and overseas property income in a third, each recording the country, the gross income, and the foreign tax already paid. The relief is capped at whatever UK tax would otherwise be due on that same income, using the calculation method in HMRC's helpsheet HS263. India is not on the short list of countries where FTCR on dividends is restricted, so a straightforward FTCR claim is available on India dividend income.

A detail the treaty doesn't fix: capital gains

Unlike dividends and interest, the UK-India treaty doesn't cap the withholding rate on capital gains. Article 14 leaves each country free to tax gains, on Indian property, shares, or mutual funds, under its own domestic law. In practice this means gains on Indian assets are taxed under India's rules and again as part of your UK worldwide income, with double taxation resolved through the FTCR credit mechanism above rather than through a treaty-set rate the way dividend and interest withholding is. It's a genuinely easy point to miss if you assume the whole treaty works the same way article by article.

No FBAR-style form, but HMRC still sees your accounts

The UK does not have a direct equivalent of the US's FBAR or FATCA, a standalone form requiring you to report the existence and balance of foreign accounts. What the SA106 pages require is the income from those accounts, not a disclosure of the accounts themselves.

That doesn't mean HMRC is blind to NRE and NRO accounts, though. Under the OECD Common Reporting Standard, Indian financial institutions report account-holder information to Indian authorities, who exchange it automatically with HMRC, entirely separate from anything you self-report. This matters for one specific, easy-to-miss trap: NRE account interest is exempt from Indian tax, but that exemption has no bearing on UK taxability. Once you're UK tax resident, NRE interest is fully taxable in the UK as worldwide income, and because no Indian tax was actually paid on it, there is nothing to credit under FTCR. NRO interest, by contrast, is taxed and generally has tax withheld in India, so a real FTCR credit is available there.

New to the UK: the Foreign Income and Gains regime

From 6 April 2025, the old non-dom "remittance basis" was abolished and replaced with a residence-based Foreign Income and Gains (FIG) regime. It's not domicile-based and doesn't depend on nationality: the test is simply whether you were non-UK tax resident for the 10 consecutive tax years before you arrived. A first-time mover from India who has never been UK tax resident meets this automatically.

• Qualifying residents can get full UK relief on foreign income and gains, India-source included, for their first four years of UK tax residence, and can bring that money into the UK during those years without triggering UK tax on it.
• It's not automatic. You claim it separately for each tax year on your return, ticking the relevant box on SA109 and reporting the actual amounts on SA106, the self-employment pages, or SA108 for gains.
• There's a real trade-off: claiming FIG relief for a year means giving up your Personal Allowance and CGT annual exempt amount for that same year, so it's worth actually running the numbers rather than assuming it's automatically the better choice, particularly if your India-source income is modest.
• Once the four-year window ends, ordinary worldwide-income taxation applies and the FTCR route above becomes your normal way of avoiding double taxation on India-source income.