For NRI families with roots in both the UK and India, inheritance planning isn't straightforward. You're not dealing with one legal system — you're dealing with two, and they don't always agree with each other. Getting this wrong can mean your family faces unexpected tax bills, lengthy legal delays, or assets frozen across borders at the worst possible time.
Here's what you need to understand.
UK Inheritance Tax: What NRIs Need to Know
In the UK, inheritance tax (IHT) is charged at 40% on the value of your estate above £325,000. If you're an NRI who has been living in the UK, your worldwide assets — including property and investments held in India — may fall within the scope of UK IHT depending on your domicile status.
Domicile is not the same as residency. You can leave the UK and still be considered UK-domiciled in HMRC's eyes, which means your Indian assets could be taxable in the UK after your death. This catches many NRI families completely off guard.
There are reliefs available — the spousal exemption, the residence nil-rate band for property passed to direct descendants, and business property relief — but claiming them requires proper planning in advance, not after the fact.
Indian Succession Laws and How They Interact
India does not currently have an inheritance tax, which is an advantage. However, the transfer of assets in India after death is governed by succession laws that vary depending on your religion — Hindu Succession Act, Indian Succession Act, or Muslim personal law — and these don't automatically align with what your UK will says.
If you hold property in India, that property will typically be governed by Indian law regardless of what your UK will instructs. A UK will alone is not sufficient to deal with Indian assets efficiently.
The Case for Two Separate Wills
One of the most practical steps any NRI family can take is having two wills — one governed by UK law covering your UK assets, and one governed by Indian law covering your Indian assets.
Without this, your family may face a lengthy and expensive process of getting a UK grant of probate recognised in India, or vice versa. Indian courts do not automatically accept UK probate, and the process of resealing a foreign grant in India can take years.
Two wills, properly drafted to avoid conflict with each other, can save your family significant time, money and stress.
Common Mistakes NRI Families Make
The most common mistake is assuming one will covers everything. The second is not updating either will after major life events — selling a property, having children, or moving between countries.
Many NRI families also hold assets jointly without understanding the survivorship implications under each country's law. In India, joint property does not automatically pass to the surviving owner in the same way it might in the UK.
Finally, failing to keep detailed records of assets in both countries — bank accounts, property deeds, investment portfolios, pension entitlements — creates enormous difficulties for the family left behind.
How Atwal Financial Can Help
Cross-border inheritance planning sits at the intersection of UK and Indian law, tax, and financial planning. It requires someone who understands both sides — not just a UK solicitor who has heard of India, or an Indian lawyer who is unfamiliar with UK IHT.
At Atwal Financial, we have been helping NRI families navigate exactly this complexity since 2008. We work with you to map your assets across both countries, identify your exposure to UK inheritance tax, and put the right structures in place so your family is protected.
If you have assets in both the UK and India and haven't yet addressed your inheritance planning, the best time to start is now.
Get in touch for a free initial consultation — contact@atwalfinancial.com or call +44 (0)20 3769 7344.
