Claim Tax Relief in India with a UK Certificate of Residence (CoR)

If you are an NRI (Non-Resident Indian) residing in the UK and earning income in India, you may be eligible for tax relief under the India-UK Double Taxation Avoidance Agreement (DTAA). To avail of these benefits, you need a Certificate of Residence (CoR) from HMRC (Her Majesty’s Revenue and Customs), which verifies your UK tax residency status.

What is a Certificate of Residence (CoR)?

A Certificate of Residence is an official document issued by HMRC that confirms an individual or business as a UK tax resident. It is required to claim tax relief on income earned in India, ensuring that NRIs do not face double taxation under the DTAA between India and UK.

Eligibility Criteria for a CoR

You can apply for a Certificate of Residence if:

• You are classified as a UK tax resident.
• India and the UK have a Double Taxation Avoidance Agreement (DTAA).
• The Indian tax authorities require confirmation of your UK tax residency.
• You qualify for tax treaty benefits under the India-UK DTAA.

Note: HMRC will not issue a CoR if you do not meet the treaty benefit conditions.

Benefits of a CoR for NRIs in the UK

With a CoR, NRIs can reduce tax liabilities on various types of income earned in India, such as:

• Rental income from Indian properties.
• Dividends from Indian companies.
• Interest income from Indian bank accounts.
• Capital gains from property or investment sales in India.

Required Information for a CoR Application

When applying for a Certificate of Residence, you must provide HMRC with:

Reason for Application: Explain why you need the CoR.

Double Taxation Agreement (DTA) Details: Specify the claim under India-UK DTAA.

Type of Income: Define the type of foreign income (rental, dividends, interest, capital gains, etc.) and the relevant DTAA article.

Period for Certification: Mention the tax year(s) for which you need the CoR.

Proof of Ownership & Taxation: Confirm that you:

• Are the beneficial owner of the income.
• Are subject to UK tax on the entire income you are claiming relief for.

Additional Information (if applicable):

If requesting a CoR for a period on or after 6 April 2013, and you have not yet filed a Self Assessment tax return, provide:

• The number of days spent in the UK during that tax year.
• If fewer than 183 days, explain why you qualify as a UK tax resident under the Statutory Residence Test (SRT).
• The date of arrival in or departure from the UK.
• If your residency status changed mid-year, specify the split-year rules under the SRT.

How to Apply for a Certificate of Residence (CoR)?

NRIs in the UK can apply for a CoR through HMRC’s online portal or by post.

Online Application:

• Log in to the HMRC Government Gateway account.
• Go to the Certificate of Residence request section.
• Enter required details and upload supporting documents.
• Submit the application and await HMRC’s response.

Postal Application:

• Download and complete the CoR application form from the HMRC website.
• Attach necessary documents, including tax returns and income details.
• Send the application to the HMRC address mentioned on the form.

Processing Time for a CoR

HMRC typically processes CoR applications within 4 to 6 weeks. However, the time may vary depending on application complexity and verification requirements, making NRI tax planning essential for timely compliance and tax relief.

Why NRIs in the UK Should Obtain a CoR?

For NRIs residing in the UK, obtaining a CoR is essential to:

• Avoid Double Taxation: Prevent paying tax on the same income in both India and the UK.
• Reduce Tax Liabilities: Claim tax relief and benefit from lower withholding tax rates.
• Ensure Compliance for Investments & Business: Meet legal requirements for Indian assets, rental properties, and investments.
• Facilitate Repatriation of Funds: Simplify fund transfers from India to the UK.

How Dinesh Aarjav & Associates Can Help?

At Dinesh Aarjav & Associates, we specialize in helping NRIs manage their tax obligations in India and the UK, including expert DTAA consultancy to optimize tax benefits under double taxation agreements. Our expert services include:

• End-to-End CoR Assistance: Ensuring correct and timely application submission to HMRC.
• DTAA & Tax Planning: Helping you legally minimize tax liabilities.
• NRI Tax Filings in India: Complying with Indian tax laws and claiming DTAA benefits.
• Seamless Fund Repatriation & Compliance: Making India-UK fund transfers hassle-free.

Conclusion

A Certificate of Residence (CoR), also known as a Tax Residency Certificate for NRI, is a crucial document for NRIs in the UK looking to claim tax relief on income earned in India under the India-UK DTAA. By leveraging the expertise of Dinesh Aarjav & Associates, you can ensure a smooth and successful CoR application process, helping you optimize your tax strategy effectively.

Need Expert Help? Contact Dinesh Aarjav & Associates Today!