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Where Taxpayers and Advisers Meet

UK tax on NRE Accounts in India

pramod
Posts: 2
Joined: Fri Sep 28, 2018 1:37 pm

UK tax on NRE Accounts in India

Postby pramod » Sat Sep 29, 2018 7:33 am

I am a UK citizen now and have A few NRE accounts & Fixed deposits in India which are earning interest yearly. This Accounts were opened in India before I came to the UK or became a Citizen of UK. No money from the UK is being transferred to India. The Money was deposited years ago when I was a NRI and a Indian citizen/passport. That money has been left unused in the accounts and just earning interest. No Tax is payable in India as it is a NRE account.
Now do I need to declare this the UK gov and pay tax on the interest earned in India? I have not put any money into the account from the UK or withdrawn from it into the UK. I just use it as spending money when I in India for daily expenses.

Please do advise.

Thanks, Pramod

AGoodman
Posts: 710
Joined: Fri May 16, 2014 3:47 pm

Re: UK tax on NRE Accounts in India

Postby AGoodman » Mon Oct 01, 2018 2:36 pm

The location of the account and source of funds is irrelevant unless you are being taxed on the remittance basis (you usually have to make an election).

Your actual position all depends on the amounts of interest. There are tax free thresholds of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. I don't believe there is any need to report unless you have an actual liability.

pramod
Posts: 2
Joined: Fri Sep 28, 2018 1:37 pm

Re: UK tax on NRE Accounts in India

Postby pramod » Wed Oct 03, 2018 9:05 pm

Thank you for your reply

DtheRed
Posts: 9
Joined: Thu Oct 05, 2017 5:35 pm

Re: UK tax on NRE Accounts in India

Postby DtheRed » Fri Oct 19, 2018 9:22 am

If you are a UK taxpayer (and don't avail of the domicile arrangements), then you pay tax on it. The money is freely remittable so there is no reason not to pay. Just add it to the foreign section of your SA (after HMRC published exchange rate conversion). Tax rate will be as per UK income tax bands.


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