NRIs Concerned: looming overhaul of the British tax system threatens to unsettle non-resident Indians (NRIs), recent migrants, and prospective UK settlers.
Expected in April 2025, the new tax regime could heighten their tax obligations and potentially dampen the UK’s allure for migration.
In response, tax experts and legal professionals have convened in London over the past month, strategizing ways to mitigate the anticipated impact.
NRIs Concerned….
The catalyst for concern stems from the UK’s proposed budget amendment, signalling the end of favourable tax treatment for UK resident non-domiciled individuals, including NRIs.
Currently, NRIs enjoy tax exemptions on Indian income and capital gains unless remitted to the UK.
However, under the proposed changes, NRIs who migrated two years prior and qualify as non-doms may receive tax relief on foreign income for the remaining two years.
For those who migrated a decade ago and maintain non-dom status, the new framework would subject them to 50% taxation on foreign income in the first year, with remittances toward pre-2025 foreign income taxed at 12% over the initial two years.
Debate ensues over whether this transition towards taxing global income will erode the UK’s appeal. The non-dom regime, prized for its tax benefits, has historically attracted wealthy Indians.
However, shortening the exemption period to four years may undermine the UK’s competitiveness against more lenient tax jurisdictions.
As NRIs and migrants grapple with impending changes, meticulous financial planning becomes imperative to navigate the evolving tax landscape and safeguard their financial interests in the UK.