151. Return to India from UK -

Double taxation

Q: Dear Sir Stumbled upon your resourceful website and I am really thankful as the content has helped me a lot. I have some basic queries and would wonder whether you can help me with this. I have been practicing doctor in UK for nearly 14 years and would be going back to India late next year. This has been our plan since we came here and is more of a socio - personal commitment rather than that of convenience as I have already established myself here. I have a British passport and currently awaiting the OCI. My wife still retains her Indian passport. 1. Does transfer of residence laws apply to such OCI card holders? Are the entitlements same? 2. Does my daughter (currently 9 years of age) benefit from standard school / college / University entrance facilities as available to other fellow Indians? 3. What happens to my tax status when I start earning there? 4. What happens to my savings and income (from renting my property in UK) from UK - is it subject to any further taxation or exempt by dual taxation? I would like to take this opportunity to thank you again for your commendable work and please continue it it has helped more information seekers than the rudimentary and often incomplete outdated government information portals With sincere regards (Name Withheld) A. Thank you for your kind email, am glad you found some of the content helpful. Regards to your questions in your email: The same Transfer of residency laws apply to OCI holders, hence duty free entitlements should be the same. OCI holders are supposed to get parity with non resident Indians in respect of economic, financial and educational fields. However schooling in India is big business these days. Some schools have found that they can charge foreign nationals a higher fee. Arguing about fees with school authorities is next to impossible. Not all, but some schools now have a column on their admissions forms asking for citizenship status of the child and or parents. I assume your daughter is a British citizen. So depending on where your daughter goes to school, you may be charged a higher tuition fee for her schooling. When you start living and earning in India, you will be taxed in India. Before leaving UK you must take steps to declare your non resident status in UK so as to protect yourself from having additional tax liabilities in UK after your departure. Normally such notifications are done by filling form P85. You can see form P85 HERE. Check this link for more information: Non- residents Liability to tax in the United Kingdom. (link removed, as mentioned in the previous page question #94) Update Feb 12, 2012: The document 'Residents and non-residents Liability to tax in the United Kingdom' has been replaced as it was updated in February 2010. A link to the new document is provided HERE Regards to taxation on income from your UK rental property, here is a link with information regarding taxation of the UK rental income of non-resident landlords. To get more information on the UK and India tax treaty click HERE.