UK Tax Liability - on money in Indian NRE/NRO accounts

[sushd]

Hi,

I have been a resident in UK since 10 years during which I have been employed full time and have never been out of the UK for more than 30 days in any given financial / calender year.

I have recently opened 2 types of bank accounts in Indian banks:
1. Non Resident External (NRE) savings account - Indian currency account, only for overseas income to be held in Indian currency; interest not taxed in India.
2. Non Resident Ordinary (NRO) savings account - Indian currency account for income generated in India or money transferred from Indian accounts; interest taxed in India, tax deducted at source.

I have also opened the following Fixed / Term deposit accounts:
3.. Non Resident Ordinary (NRO) fixed deposit - Indian currency account, interest taxed in India, tax deducted at source.

All monies held (principal of fixed deposit / transfers from UK into NRE / transfers from Indian accounts into NRO / gifts into NRO bank account / interest earned) in all these mentioned types of accounts have remained in the respective accounts and have not been transferred to UK at anytime.

I would like to understand the my UK tax liability due to money held and interest earned in the above mentioned accounts / deposits.

Questions:
1. Do I need to declare these accounts (NRO Savings/NRO Fixed deposits) or interest earnings in the Income tax return?
2. Is the interest earned in NRO accounts (which is taxed at source in India) taxable in the UK?
3. Since interest earned on NRE account is not taxed in India, and the money has been transferred from my UK account, it must be declared in the UK income tax return - just as I declare interest earned from by UK bank accounts. Is that correct?
4. I was told by an accountant, whom I have spoken to on the phone only, that interest <£2000 in a year need to be declared. Is that correct?

India and UK have Double Tax Avoidance agreement in force, though I do not know if it affects me or how.


Thanks in advance to anyone who help answer the queries and provide guidance through this forum.

regards

[pawncob]

1. Yes
2. Yes
3. Yes
4. You are UK resident and must declare your world wide income in the UK. You'll receive a credit for any tax deducted at source under the Double Tax Agreement.

[bd6759]

Strange that you mention overseas income, but don't ask if that should be taxed in the UK?

[sushd]

Strange that you mention overseas income, but don't ask if that should be taxed in the UK?

Q2 and Q3 above??

I do not have overseas income from employment / self-employment / business. The money in the NRO account is all the accumulated savings that I had built over the years and the only "income" there-in is the interest that I (will) get.

[sushd]

Thanks pawncob.

Sorry, just realized that I wrote the following wrong!!

4. I was told by an accountant, whom I have spoken to on the phone only, that interest <£2000 in a year need to be declared. Is that correct?

Actually, what I mean to write was that he told me that interest <£2000 in a year in an NRO account (so, taxed at source in India) need not be declared. Is that correct?

But, based on your answers above, I think that (not declaring <£2000 interest income) would be withholding factual information.