Master prompt
HMRC tax registration, PAYE, Self Assessment, SRT and India-UK DTAA (UK settlement)
New arrivals: PAYE for employees, Self Assessment for self-employed and high earners, Statutory Residence Test for first-year arrivers, split-year treatment, and India-UK DTAA Form 10F mechanics.
UKSettlementHMRCPAYESelf AssessmentSRTDTAAIndia tax
Coach [CLIENT_NAME] through UK tax obligations from [UK_ARRIVAL_DATE]. This is consultant advisory only - tax law sits outside OISC scope; flag onward referral to a UK chartered tax adviser (CTA) or tax-qualified accountant (ICAEW / ACCA / CIOT) for any non-trivial position.
CLIENT SUMMARY
- Visa: [VISA_CATEGORY]
- Employment: [EMPLOYMENT_STATUS]
- UK arrival: [UK_ARRIVAL_DATE]
- Expected UK income year 1: GBP [EXPECTED_UK_INCOME]
- Continuing Indian income: None
- Indian asset sales: None
UK TAX YEAR: 6 April to 5 April (peculiar legacy from the 1752 calendar change)
§1 - STATUTORY RESIDENCE TEST (SRT) - Finance Act 2013 Sch 45
UK tax residency is the starting point for liability. The SRT is a flowchart of automatic + sufficient-ties tests applied to each tax year.
1.1 Automatic OVERSEAS tests (any one applies -> non-resident for that year)
(a) Test 1: < 16 days in UK in the year (if UK resident in 1+ of prior 3 years)
(b) Test 2: < 46 days in UK in the year (if NOT UK resident in any of prior 3 years)
(c) Test 3: Working full-time abroad (overseas full-time work, < 91 days UK, < 31 work days in UK)
1.2 Automatic UK tests (any one applies -> UK resident for that year)
(a) Test 1: 183+ days in UK in the year
(b) Test 2: Only home is in UK for 91-consecutive-day window of which 30 in tax year
(c) Test 3: Full-time work in UK over 365-day period overlapping the year (sufficient continuity)
1.3 Sufficient TIES test (if neither automatic test resolves)
- Counts ties to UK:
(i) Family tie (spouse / minor child UK resident)
(ii) Accommodation tie (available accommodation for 91+ days, used for 1+ night)
(iii) Work tie (40+ days working in UK, 3+ hours/day)
(iv) 90-day tie (90+ days in UK in either of prior 2 years)
(v) Country tie (more days in UK than in any other single country - applies only to "leavers")
- If "arriver" (not previously UK resident in any of prior 3 years), only first 4 ties count
- Day-count thresholds depend on number of ties (see Finance Act 2013 Sch 45 Part 1):
Arrivers:
< 46 days in UK: non-resident regardless of ties
46-90 days: 4 ties needed for residence
91-120 days: 3 ties needed
121-182 days: 2 ties needed
183+ days: automatic UK resident
Leavers (had UK residence in any prior 3 years) - even tougher thresholds
§2 - APPLYING SRT TO [CLIENT_NAME] FOR TAX YEAR OF ARRIVAL [UK_ARRIVAL_DATE]
- Count days in UK from [UK_ARRIVAL_DATE] to following 5 April
- For most full-year arrivers settling in UK, automatic UK test 1 (183+ days) is satisfied OR ties test produces UK residence
- State the expected outcome: UK RESIDENT for tax year of arrival
§3 - SPLIT-YEAR TREATMENT (Finance Act 2013 Sch 45 Part 3, Cases 1-8)
If UK resident for the year of arrival but only part of it spent in UK, may qualify for "split-year" - tax UK income only from arrival date, not from 6 April.
Common cases for arrivers:
- CASE 4: Starting to have only home in UK during the year
- Was NOT UK home at start of year
- At some point in year, only home (or all homes) in UK
- Must satisfy "only home in UK" test for at least 91 days at end of year
- CASE 5: Starting full-time work in UK
- Was non-resident year before
- Takes up full-time UK employment for sustained period (365 days minimum)
- 75% of work days in UK
- CASE 6: Ceasing full-time work overseas
- Similar conditions to Case 5 but reverse direction
- CASE 8: Starting to have UK home (more permissive than Case 4)
- Was non-UK resident immediately before year of arrival
- At some point starts to have a home in UK
- Maintains the home from that point
For [CLIENT_NAME] with [VISA_CATEGORY]:
- If Skilled Worker / Health and Care Worker / similar employed visa: CASE 5 likely applies (full-time UK work)
- If Student visa: CASE 4 / CASE 8 typically (only UK home)
- If Spouse visa with employed spouse: CASE 4 / CASE 8
- If self-employed: more complex; full-time work definition under Sch 45 para 26 - "sufficient hours" (averaging 35+ per week)
Split-year benefit: only UK-source income from arrival date is taxable; pre-arrival period treated as non-resident (foreign income not UK-taxable).
§4 - PAYE (Pay As You Earn) - Income Tax (Earnings and Pensions) Act 2003
For employed [CLIENT_NAME]:
- Employer deducts income tax + NI directly from salary
- HMRC issues tax code (e.g. 1257L = personal allowance GBP 12,570)
- First month: often emergency code (BR or 0T) until P45 from previous employer received - usually NO P45 for new arrival; HMRC issues correct code after starter checklist
- Year-end: P60 statement showing total income, tax paid
- If only source of income is employment under PAYE, USUALLY no Self Assessment required
UK income tax thresholds 2025-26 (verify current - HMRC publishes annually):
- Personal allowance: GBP 12,570 (income up to this is tax-free, BUT tapers if income > GBP 100,000)
- Basic rate 20%: GBP 12,571 - GBP 50,270
- Higher rate 40%: GBP 50,271 - GBP 125,140
- Additional rate 45%: GBP 125,141+
NI contributions (NIC) - Class 1 for employees:
- 8% on weekly earnings GBP 242-967 (2025-26)
- 2% on earnings above GBP 967/week
- Verify current - HMRC publishes thresholds annually
If [EXPECTED_UK_INCOME] is GBP [EXPECTED_UK_INCOME]:
- Approximate take-home calculation (assuming personal allowance applies):
Gross: [EXPECTED_UK_INCOME]
Less personal allowance 12,570
Taxable: [EXPECTED_UK_INCOME] - 12,570
Income tax + NI applied at rates above
Approximate take-home % varies by salary
§5 - SELF ASSESSMENT (SA)
Required if [CLIENT_NAME]:
- Self-employed (sole trader) - register for SA + Class 2 / Class 4 NIC
- Director of UK Ltd company (even if no dividends taken)
- Income > GBP 100,000 (personal allowance taper)
- Property income (UK or overseas)
- Investment income > GBP 10,000
- Foreign income > GBP 2,000 (untaxed in UK)
- Capital gains > GBP 3,000 (2024-25 threshold; verify - falling year-by-year)
- High-income child benefit charge (HICBC)
- Claiming reliefs not given automatically through PAYE
For [EMPLOYMENT_STATUS]:
- If "Employed (PAYE only)" - SA usually NOT required unless above triggers apply
- If "Self-employed" - SA mandatory; register within 3 months of starting trading at https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed
- If "Director of own UK Ltd company" - SA + Corporation Tax return + PAYE if salary
- If "Mix" - SA required
DEADLINES (UK tax year ending 5 April):
- Register for SA: by 5 October following end of tax year
- Paper return: 31 October
- Online return: 31 January
- Payment of tax: 31 January (balancing) + 31 July (payment on account)
PENALTIES for late SA:
- GBP 100 if 1 day late
- Additional GBP 10/day after 3 months
- GBP 300 or 5% of tax due (whichever higher) at 6 and 12 months
§6 - INDIA-UK DTAA - APPLYING DOUBLE-TAXATION RELIEF
The India-UK Double Taxation Avoidance Agreement (signed 1993, amended 2013 protocol) prevents double taxation on the same income.
6.1 Residence tie-breaker - Article 4
- If [CLIENT_NAME] is dual resident (UK + India in same tax year - common in year of move):
(a) Permanent home test - where is permanent home?
(b) Centre of vital interests - personal + economic ties
(c) Habitual abode
(d) Nationality
(e) Mutual agreement
- For first year of move from India: typically tie-broken to UK if family + work + home all moved
6.2 Employment income - Article 14 / 15
- UK-source employment income: taxable in UK (employer + work in UK)
- Indian-source employment (e.g. salary from Indian employer for work in India done before move): not UK-taxable if non-resident at that time
- For split-year cases: pre-arrival period taxable in India only
6.3 Rental income from Indian property (if None includes rent)
- India retains taxing rights as the property is in India - Article 6
- UK ALSO taxes (worldwide income basis for UK residents)
- DTAA credit: tax paid in India offsets UK tax on same income
- Mechanism: report Indian rental income on UK SA Form SA106 (foreign income); claim Foreign Tax Credit Relief
6.4 Dividend / interest income from Indian investments
- DTAA caps Indian withholding at 15% (dividends) or 10% (interest) - lower than 30%+ default Indian non-resident TDS
- To claim DTAA rate: file Form 10F in India + Tax Residency Certificate (TRC) from HMRC
- TRC obtained from HMRC online - https://www.gov.uk/guidance/get-a-certificate-of-residence
- With TRC, Indian payer can apply DTAA rate at source instead of standard TDS
6.5 Capital gains on sale of Indian property (if None is being considered)
- Article 13 - India retains taxing rights on immovable property in India
- UK also taxes UK residents on worldwide capital gains
- Indian LTCG: 12.5% on indexed gain (post-July-2024 rule - verify; previously 20% indexed)
- UK CGT on overseas property: 18% / 24% (residential), 10% / 20% (non-residential) - 2024-25 rates
- DTAA credit: Indian tax offsets UK tax
- SIGNIFICANT PLANNING POINT: sale BEFORE becoming UK resident escapes UK CGT entirely - consider timing
§7 - REMITTANCE BASIS (HISTORIC, NOW SUNSETTED)
- Up to 5 April 2025: non-domiciled UK residents could elect remittance basis - tax UK income + only Indian income remitted to UK (after 7 years a fee applied)
- From 6 April 2025: new "foreign income and gains" (FIG) regime - 4 years of no tax on foreign income/gains for new arrivers regardless of domicile, then full taxation
- For [CLIENT_NAME] arriving [UK_ARRIVAL_DATE] (post-April 2025): the 4-year FIG regime is the relevant relief
- In year 5 onwards, all foreign income (Indian rent, Indian dividends, Indian gains) is UK-taxable
- Election to use FIG must be made in Self Assessment
This is HIGH-VALUE planning territory - mandatory to refer to a UK CTA who specialises in Indian-origin clients (Crowe UK, BDO India desk, EY India desk, RSM, Mazars India desk).
§8 - HMRC PERSONAL TAX ACCOUNT
Create one at https://www.gov.uk/personal-tax-account:
- View tax code, PAYE history, NI record
- Check estimated annual income tax
- Update personal details
- Apply for marriage allowance transfer (GBP 1,260 transferable from non-earning spouse - useful if [VISA_CATEGORY] is Spouse and one partner not yet working)
- Claim tax relief on professional fees (work-related)
§9 - INDIAN TAX NOTIFICATIONS (within 30 days of UK move)
- Update Indian bank accounts: resident savings accounts -> NRO (Non-Resident Ordinary) per FEMA notification
- Open NRE (Non-Resident External) for repatriable funds
- Indian Income Tax Return: file IF Indian-source income exceeds threshold (basic exemption INR 2.5L old regime / INR 3L new regime FY 2024-25)
- PAN remains valid (lifelong)
- Aadhaar - mobile number changes need updating
- File Form 10F to Indian banks/payers if benefiting from DTAA reduced TDS rates
§10 - FIRST-YEAR ACTION LIST FOR [CLIENT_NAME]
[ ] Notify employer of NINO + bank details for payroll
[ ] Create HMRC Personal Tax Account
[ ] Check tax code on first payslip (should be 1257L or starter checklist code; emergency code corrected within 1-3 months)
[ ] If self-employed: register for SA at gov.uk within 3 months of trading
[ ] If None is non-trivial: prepare for SA filing
[ ] Confirm split-year case (Case 4 / 5 / 8 typical) with a UK CTA
[ ] If None is planned: timing strategy with CTA (pre-vs-post 4-year FIG window)
[ ] Convert Indian bank accounts to NRO; open NRE/FCNR
[ ] Obtain UK TRC if needed for Indian DTAA claims
[ ] File first SA by 31 January following first full UK tax year
[ ] File Indian ITR if Indian income exceeds threshold
§11 - RED-FLAG ESCALATIONS TO UK CTA
Refer to a CTA / qualified UK tax adviser if any of:
- Indian capital gains > GBP 50,000 in any year (Article 13 + UK CGT)
- Indian business interests / Indian Ltd company directorships / Indian partnership share
- PFIC-like / Indian mutual fund holdings (complex UK reporting under offshore fund rules)
- Indian inheritance received (UK IHT residence rules - long-term resident UK domicile post 15-year rule)
- Indian rental income > GBP 10,000/year (complex foreign property pages on SA)
- Indian employer continuing to pay salary post-arrival (place of service questions)
- Cryptocurrency / FX with Indian counterparty
- Trust structures (Indian HUF, Indian discretionary trusts) - UK trust reporting
End with: "DRAFT - for OISC-regulated adviser or solicitor review AND mandatory referral to a UK chartered tax adviser (CTA) or qualified UK tax accountant. Tax law is OUTSIDE OISC scope of practice. The new 4-year FIG regime (from 6 April 2025), India-UK DTAA Form 10F mechanics, and SRT split-year treatment all require expert advice. Verify against HMRC published rates, Finance Act 2024 / 2025 provisions, and the current India-UK DTAA text before sharing with client. Not tax advice."Unlock the vault to see the full prompt