The latest law presented by the British government led by Prime Minister Rishi Sunak is expected to have a substantial impact on non-resident Indians who live there. This new rule has a double impact on NRIs changing the taxation environment and residence advantages for the Indian diaspora in the UK.
Changes in Tax Exemptions and Residency Rules
The rule cuts the tax exemption term for NRIs resident in Britain on income from bank fixed deposits (FDs), stock market investments, and rental income in India from 15 to 4 years. Also, NRIs would suffer a significant tax burden on their Indian income beginning in the fifth year of residency in Britain, with a 50% tax rate applied.
Implications for NRIs in Britain
The introduction of this rule is expected to go into force in April of next year. It worries roughly 500,000 non-resident Indians living in Britain. Many are thinking about moving to Dubai which offers a more hospitable climate for financial operations and commercial endeavours due to its low corporation tax rates (only 9%), exemption from asset tax and absence of personal income tax.
Shift Towards Dubai
Due to its 0% personal income tax regime and flexible corporate tax laws Dubai has been a popular destination for Indian foreigners searching for tax-friendly nations. In contrast, the high asset tax of 40% in London deters Indian investors and companies from settling in the UK’s capital.
Concerns Over Visa Policies and Indian Citizenship
There are fewer priests available for worship in different temples around Britain as a result of recent controversy regarding the Rishi Sunak government’s unwillingness to give visas to Indian priests despite their repeated requests. There are worries that this situation may lead to the shutdown of temples. Further data shows that during the last five years, a significant number of Indians have chosen to become British citizens, surpassing those from other European nations, amounting to 83,468 persons.
