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ISA
ISA wrapper status is UK-only. From the day you are Indian resident, ISA growth, dividends and interest are taxable in India. Most clients either liquidate before the move or treat the ISA as a normal portfolio post-move.
UK tax wrappers do not automatically keep their UK treatment in India. Review an ISA and a SIPP separately, alongside your Indian residential status, withdrawal dates and treaty position. Inventory the accounts before moving, preserve contribution and transaction records, and confirm the treatment of growth, income and withdrawals for your facts.
Last reviewed: · Reviewed by Regi Tom Antony, FCA
ISA wrapper status is UK-only. From the day you are Indian resident, ISA growth, dividends and interest are taxable in India. Most clients either liquidate before the move or treat the ISA as a normal portfolio post-move.
Under the India-UK DTAA, pension payments are generally taxable in the state of residence. SIPP draws while Indian resident are taxable in India with credit for UK tax. Lump-sum vs drawdown sequencing matters.
If you qualify for RNOR, foreign-source income (including SIPP draws) is typically outside the Indian net. Plan large draws to land in the RNOR years.
You can keep an ISA after leaving the UK and it stays free of UK tax, but you cannot pay new money in while non-resident (with narrow exceptions for Crown employees). India does not recognise the wrapper: while you are non-resident or RNOR in India, ISA income is foreign income outside Indian tax; once you are ordinarily resident, dividends, interest and gains inside the ISA are taxable in India. Some UK providers restrict accounts for overseas customers, so check before you leave.
UK pensions can normally be accessed from age 55, rising to 57 from April 2028. Up to 25% can usually be taken as a UK tax-free lump sum, subject to the lump sum allowance. India does not automatically follow the UK's tax-free treatment, so a large lump sum taken while you are ordinarily resident in India may be taxable here. Taking it in a non-resident or RNOR year usually avoids the question.
Transfers abroad must go to a recognised overseas scheme (QROPS) to avoid UK unauthorised-payment charges, and since 30 October 2024 most such transfers attract a 25% overseas transfer charge unless you live in the same country as the receiving scheme. For most returning Indians, leaving the pension in the UK and drawing it over time is simpler.
The UK is a notified country under Section 89A. If income in your SIPP would otherwise be taxed in India as it accrues, Section 89A, claimed through Form 10EE, lets it be taxed in the year of withdrawal instead, matching the UK's treatment. The form must be filed before the due date of the return for the first year you claim it.
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This guide is general information published by RTA & Associates. It is not tax, legal, financial or investment advice, and it does not create a client relationship. It does not take account of your personal circumstances, and you should not act or refrain from acting on the basis of anything here.
Cross-border outcomes turn on the specific facts — your day-counts, the timing of your move, the wrappers you hold and the treaty position between the two countries. A small change in any of those can change the answer completely.
References to the law, rules or practice of countries other than India are included for general orientation only. They are not advice on the law of that country, and they should be confirmed with a qualified adviser in that jurisdiction before you act.
Tax law, exchange-control rules and treaty positions change, and they change often. This page reflects our understanding as at the date shown above. We do not undertake to update it.
To the extent permitted by law, RTA & Associates and its partners and staff accept no liability for any loss arising from reliance on this page. For advice on your own position, book a consultation.
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