UK/India DTT
UK/India Double Tax Treaty
Estate Planning Opportunities Arising out of the UK/India Double Tax Treaty
Book ConsultationUK/India Double Tax Treaty
The 1956 Estate Taxes Treaty between the UK and India has the effect of conferring inheritance tax benefits on long term UK residents with an Indian domicile. We help such individuals may plan their affairs to maximise treaty benefits and ensure tax efficiency in respect of their worldwide estates.
The Default Position
Individuals with a UK domicile are subject to UK inheritance tax on their worldwide assets. Advice should always be taken on whether or not assets are located in the UK or not, for this purpose. We are able to assist in this regard.
Individuals with a non-UK domicile are subject to UK inheritance tax only on their UK situs assets and not on their non-UK situs assets. UK inheritance tax will, however, be chargeable on their worldwide assets if they
(i) acquire a domicile of choice in the UK;
(ii) become deemed domiciled in the UK by spending at least 15 of the last 20 tax years in the UK;
(iii) elect to be taxed as UK domiciled; or
(iv) are formerly domiciled residents (individuals born in the UK with a UK domicile of origin and are resident in the UK).
UK/India Treaty Benefits
The UK/India double tax treaty largely overrides the UK concept of deemed domicile.
Provided certain conditions are met, UK inheritance tax is chargeable only on UK situs assets and not on the worldwide estate.
This requires careful planning and does not work for all asset classes, so expert advice from the Artha Estate Planning team should always be taken.
How Can We Help?
This is a complicated area of planning and failure to pay attention to detail can have negative consequences, such as UK inheritance tax being chargeable on an entire estate (rather than on a portion) resulting in a far higher inheritance tax charge than anticipated.
Artha Estate Planning’ advisory team are experienced to advise on estate planning matters using India/UK double tax treaty benefits, as well as general reliefs and exemptions available under UK laws. They are able co-ordinate all relevant documentation (including those from Indian lawyers) so clients have one point of contact in their own time zone to ensure the journey is seamless.