Many British expats and NRIs living in India retain UK-based investments including ISAs, share portfolios, unit trusts, and investment bonds. Managing these assets from overseas requires an understanding of both UK and Indian tax rules, platform access restrictions, and the regulatory environment.
Atwal Financial helps clients maintain and optimise their UK investment portfolios while living in India. This guide covers the practical and tax considerations you need to be aware of.
Can You Keep UK Investments When Living in India?
Yes, in most cases you can retain existing UK investments. However, there are important restrictions:
- ISAs: You cannot make new contributions to a UK ISA as a non-UK resident, but existing ISAs remain open and continue to grow tax-free in the UK
- UK Investment Platforms: Some UK platforms restrict access for non-UK residents. You may need to transfer to an international platform
- New Investments: Making new UK investments as an India resident may trigger regulatory obligations under FEMA and Indian tax law
Tax Treatment of UK Investments in India
As an Indian tax resident, your worldwide income is taxable in India. This includes:
Dividends
UK dividends received by Indian residents are taxable in India at your applicable slab rate. The UK may also withhold tax, but relief is available under the UK–India DTAA.
Capital Gains
Gains from selling UK investments are taxable in India. The tax rate depends on the holding period and the type of asset. Long-term capital gains on listed securities held for more than 24 months are taxed at 20% with indexation benefit under Indian law.
Interest Income
Interest from UK bank accounts and bonds is taxable in India. The UK generally does not tax interest paid to non-residents, so the primary tax obligation is in India.
ISA Tax Treatment for India Residents
This is a commonly misunderstood area. While ISAs remain UK tax-free, India does not recognise the ISA tax wrapper. Income and gains within an ISA are taxable in India for Indian tax residents. This means:
- Dividends within an ISA are taxable in India
- Capital gains on ISA investments are taxable in India
- The ISA wrapper only provides UK tax exemption, not Indian
This is an important consideration when deciding whether to retain or liquidate UK ISAs. Our financial planning advisers can help you assess the best approach.
Platform Access and Reporting
Many UK investment platforms have restrictions for overseas residents:
- Dealing restrictions: Some platforms prevent non-UK residents from making new trades
- Account closure: In some cases, platforms may require you to transfer out or close your account
- International platforms: Platforms like those offered through international financial centres may be more suitable for India-based investors
Our wealth management service helps clients transition to appropriate platforms when moving to India.
FEMA Compliance
Under the Foreign Exchange Management Act (FEMA), Indian residents holding foreign assets must comply with reporting requirements:
- Declare foreign assets in Schedule FA of your Indian tax return
- Report foreign bank accounts and investment accounts
- Non-compliance can result in significant penalties
Investment Strategy Considerations
When managing UK investments from India, consider:
- Currency risk: GBP/INR fluctuations affect the real value of your UK investments
- Asset allocation: Diversify across both UK and Indian markets
- Rebalancing: Regular review ensures your portfolio aligns with your goals and risk profile — use our risk assessment tool
- Retirement planning: Coordinate UK pension drawdown with Indian investment income for tax efficiency
Frequently Asked Questions
Can I still use my UK ISA if I live in India?
You can keep existing ISAs but cannot make new contributions. Note that ISA income is taxable in India as India does not recognise the UK ISA tax wrapper.
Do I have to report UK investments on my Indian tax return?
Yes, Indian tax residents must declare all foreign assets including UK investments in Schedule FA of their tax return. Income from these assets is also taxable in India.
Can I open new UK investment accounts from India?
This is generally restricted. Most UK platforms do not accept new applications from non-UK residents. International investment platforms may be more appropriate.
How are UK capital gains taxed in India?
UK capital gains are taxable in India based on the holding period and asset type. Long-term gains on listed securities are taxed at 20% with indexation. The DTAA provides relief to prevent double taxation.
Should I sell my UK investments before moving to India?
Not necessarily. The decision depends on your tax position, the type of investments, and your long-term financial plan. Speak to our advisers for a personalised review.
