Non-Resident Indians (NRIs) are exploring various ways to evade the impact of proposed tax rule in the UK. The new tax rule has triggered a rush among wealthy NRIS in the country to establish tax-friendly ownership in other countries, according to a report by Moneycontrol.

The NRIs are looking to find ways to safeguard the income they are making from their assets in India. One of the ways include disconnecting the control of UK-based beneficiaries from assets by creating multiple layers of entities in other jurisdictions like Jersey, the UAE or Singapore.

The report says Dubai may benefit from the proposed new tax rule in the UK. It might propel Dubai on the forefront of choices for Indian NRIs in the UK who are seeking favorable tax terms.

Dubai offers minimal personal taxation. It is emerging as a preferred destination for global tax residency.

New Tax, New Trouble

Over 83,000 Indians have renounced their India citizenship to become the citizens of the United Kingdom in last 5 years, according to Government data.

Favorable tax-regime has been one of reasons why these NRIs have adopted the UK as their new homes. However, many of these former Indian citizens may have to pay more tax they ever planned.

As per new tax rule, the UK Government has proposed to reduce tax exemption on foreign income to 4 years from 15. Learn More here. The new tax rule in the UK is expected to come into effect from April 2025. It is believed that NRIs and new immigrants to the UK will end up paying more tax due to change in the tax rule.

The proposed new tax rule in the UK has become a cause of concern for NRIs in the country. It has threatened to disrupt succession planning and overall financial planning of wealthy NRIs and those those migrated to the country in recent years.

Want to learn the art and science of managing your money? The 1% Club can help. Details here