Moving back to India from the UK?
Here's what changes for your ISAs, SIPPs, brokerage accounts, and tax residency.
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SEBI RIATAX RESIDENCY
When do you become an Indian tax resident again?
Your residency status is determined by days spent in India.
Either of these makes you a tax resident
Rule 1
182 days or morein India during one financial year.
Rule 2
60 days or more this yearand365 days or more across the previous 4
Once you're a resident, your global income, including UK dividends and capital gains, becomes taxable in India. Your move date relative to the financial year can shift this by a full year.
Note: You should calculate your exact departure date using HMRC's Statutory Residence Test (SRT). Qualifying for "Split Year Treatment" ensures you are not taxed as a UK resident for the entire tax year you leave.
TRANSITIONAL STATUS
What is RNOR, and why does it matter?
Between NRI and ordinary Indian resident, there's a transitional status called Resident but Not Ordinarily Resident (RNOR). During this window, your UK-sourced income is generally not taxed in India.
You qualify if
- 1You were an NRI for 9 of the previous 10 years, or
- 2You spent fewer than 730 days in India over the previous 7 years.
RNOR window typically lasts
2 – 3 years
Outside Indian tax during RNOR
- ✓Capital gains from selling UK stocks
- ✓Dividends from your UK portfolio
- ✓UK rental income
- ✓Interest from UK bank accounts
Crucial Rule: To utilize these exemptions, funds must be received in your UK bank account first. Direct wiring to an Indian account makes them taxable.
FILING REQUIREMENTS
Disclosures and filings at each stage
Your filing obligations are limited during RNOR, and ramp up sharply once you become an Ordinary Resident.
| Requirement | NRI | RNOR | Ordinary Resident |
|---|---|---|---|
| UK income taxable in India | No | No | Yes |
| Schedule FA (foreign asset disclosure) | No | No | Yes |
| Schedule FSI (foreign source income) | No | No | Yes |
| Form 67 (foreign tax credit claim) | No | No* | Only if claiming foreign tax credit |
| Advance tax on foreign income | No | No | Yes |
| Black Money Act penalties for non-disclosure | No | No | Yes |
* Form 67 may apply to an RNOR in case of foreign income that becomes taxable in India.
The key shift from RNOR to Ordinary Resident: your global income becomes taxable, and you need to disclose all brokerage accounts and holdings, ISAs, SIPPs, and property to the Indian tax authorities.
UK BROKERAGE ACCOUNTS
What happens to your UK brokerage accounts & stocks?
When you move back, UK brokerages (like Hargreaves Lansdown, AJ Bell, or Interactive Investor) may restrict your account to 'reduce-only' or force you to liquidate because you are no longer a UK tax resident.
Option 1: Transfer in-kind (Recommended)
Move your General Investment Account (GIA) portfolio to an India-friendly global broker like Paasa without selling. This allows you to retain your positions and avoid triggering immediate UK capital gains tax.
Option 2: Liquidate your GIA holdings
Sell your positions and repatriate the cash. Note that if you realize capital gains while still a UK tax resident, they may be subject to UK Capital Gains Tax (CGT) subject to your annual exempt allowance.
UK ISAs
What happens to your ISAs?
The Indian government does not recognize the tax-free status of UK ISAs. Once you become a resident in India, all ISA growth and dividends are fully taxable in India.
Option 1: Liquidate your ISA before departure
Selling and closing your Cash or Stocks & Shares ISAs before you officially leave the UK ensures the withdrawal is completely tax-free in both the UK and India.
Option 2: Keep the ISA open
You can leave the ISA open, but you cannot make new contributions after leaving the UK. Any dividends, interest, or capital gains generated after you become an Indian resident must be declared and taxed in India.
Lifetime ISA (LISA) Warning
Unlike Cash or Stocks & Shares ISAs, accessing a Lifetime ISA (LISA) before age 60 for reasons other than buying a first home triggers a 25% government withdrawal charge. This effectively claws back the 25% government bonus and levies a penalty on your initial principal. Consider leaving LISAs open if you wish to avoid this penalty.
UK PENSIONS
Should you transfer your UK pension (SIPP or Workplace) to India?
Generally, no. Transferring a UK pension (SIPP or Workplace) to an Indian QROPS usually triggers a severe 25% Overseas Transfer Charge.
| Account / Option | Action on Departure | UK Tax Treatment | Indian Tax (as Ordinary Resident) |
|---|---|---|---|
| SIPP / Workplace Pension | Leave invested in the UK | Tax-deferred growth continues | Drawdowns taxed as pension income at slab rate; DTAA relief may apply |
| PCLS (25% tax-free lump sum) | Withdraw at age 55+ | Completely tax-free in the UK | Tax-free in India ONLY if claimed during your RNOR window; fully taxable at slab rates afterward |
Why QROPS transfers are rarely recommended
Transferring a UK pension to a Qualifying Recognized Overseas Pension Scheme (QROPS) in India sounds appealing but triggers a 25% Overseas Transfer Charge under HMRC rules unless the QROPS is established in the country you reside in AND meets extremely narrow requirements. Most Indian QROPS schemes have been suspended or disqualified by HMRC. Leaving it invested in the UK is almost always the most tax-efficient route.
INHERITANCE TAX & PROPERTY
Will you be subject to UK Inheritance Tax (IHT)?
The UK overhauled IHT rules in 2025. Exposure now depends strictly on your years of UK tax residency.
Short-term resident
If resident for fewer than 10 of the last 20 years, your worldwide assets are exempt. However, UK-situs assets (UK property, direct UK shares) remain subject to a 40% IHT above the nil-rate band.
Long-term resident
If resident for 10+ of the last 20 years, your worldwide estate (including Indian assets) remains in the UK IHT net for up to 10 years after you depart.
EXIT TAX
Will you owe a UK departure tax when you leave?
No deemed disposition
The UK does not levy a general "exit tax" or deemed disposition on your assets when you leave. You only pay capital gains tax upon actual sale.
Asset Sale Timing
The exact date your UK residency ends under the SRT dictates whether pre-departure asset sales are taxed by HMRC. Timing is critical.
FAQ
Common questions returning UK NRIs ask
COUNTRY GUIDES
Guides for where you're returning from
Each guide breaks down brokerage, retirement, tax, and exit considerations for your origin country.
HOW PAASA HELPS
Built for returning Indian professionals
From navigating your RNOR window to generating exact Schedule FA filings, Paasa is the financial home for your transition back to India.
In-kind brokerage transfers
Move eligible accounts from UK brokerages so you don't book taxable capital gains.
Estate Tax Protection
Direct access to Ireland-domiciled UCITS ETFs, allowing you to legally shield your investments from the 40% US Estate Tax applied to non-residents holding US equities.
Schedule FA and FSI reports
Year-end disclosures generated for every foreign holding, tailored exactly for Indian reporting requirements.
LRS-compliant remittance
Send money abroad under the USD 250,000 annual window to keep compounding your wealth globally.
RNOR-aware strategy
Built around your specific planning window so you can optimize cost-basis resets before the window closes.
You own your assets
Your holdings are held in your name at our global custodian, Interactive Brokers.
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Book a call with a Paasa advisor to map out your UK exit (ISA/SIPP strategies, departure tax, and Schedule FA filings).