UK Company Tax for Indian Residents: Complete 2026 Guide

Corporation Tax, Indian Tax, POEM, Dividends, Foreign Assets, Foreign Tax Credit & UK–India DTAA Explained

An Indian resident can own and operate a UK Limited Company without moving to the United Kingdom.

But incorporation is only the corporate-law layer.

The tax analysis is more complex.

A UK company owned by somebody living in India can potentially involve two taxpayers, two jurisdictions and several different tax concepts at the same time.

The company itself may have UK Corporation Tax obligations.

The Indian shareholder or director may separately have Indian tax and reporting obligations.

And in some circumstances, the way the company is actually managed or operated from India can create additional questions such as:

• Place of Effective Management — POEM;
• Permanent Establishment — PE;
• foreign-asset reporting;
• foreign-source income;
• Foreign Tax Credit;
• UK–India treaty treatment.

The critical starting principle is therefore:

A UK company and its Indian owner are not the same taxpayer.

Likewise:

Registering the company in Britain does not automatically remove Indian tax obligations.

But the opposite oversimplification is also wrong:

Living in India does not automatically mean India taxes every pound of profit earned by your UK company.

The correct analysis depends on who earned the income, where the company is resident, where the shareholder is resident, where management occurs, what operations exist in India and how money is transferred between the company and its owners.

If you have not yet incorporated, first read our UK Company Formation from India — Complete 2026 Guide⁠.

Quick Answer: How Is a UK Company Owned by an Indian Resident Taxed?

For most founders, think about the structure in layers.

The UK company and the Indian shareholder should therefore be analysed separately before they are connected again through:

• salary;
• dividends;
• loans;
• interest;
• intercompany payments;
• capital contributions.

1. Is a UK Limited Company Tax Resident in the UK?

Normally, a company incorporated in the UK is treated as UK resident for Corporation Tax purposes, subject to the applicable residence and treaty rules.

That means an ordinary UK Ltd can potentially need to deal with:

• Corporation Tax;
• annual statutory accounts;
• Company Tax Returns;
• accounting records;
• tax-payment deadlines;
• VAT where applicable;
• PAYE where applicable;
• relevant allowances and reliefs.

The fact that the shareholder or sole director lives in India does not, by itself, remove those UK obligations.

So a company can be:

incorporated in England

while its sole shareholder lives in:

Mumbai, Delhi, Bengaluru, Hyderabad or Chennai

and the company can still fall within the UK Corporation Tax framework.

2. What Is the UK Corporation Tax Rate in 2026?

HMRC’s current 2026 rates are:

These thresholds can be proportionately reduced where the accounting period is shorter than 12 months and can also be affected by the number of associated companies.

That means saying simply:

“UK Corporation Tax is 25%”

is incomplete.

3. Example: Small Indian-Owned UK Company

Suppose a UK software company has:

Revenue: £80,000
Allowable expenses: £40,000
Taxable profit: £40,000

Assuming the relevant conditions are satisfied, the profit may fall within the 19% small profits rate.

A company with:

£300,000 taxable profit

would generally fall within the 25% main rate.

The key point is:

Corporation Tax is concerned with taxable profit, not simply turnover or money received into the bank account.

4. Revenue Is Not the Same as Taxable Profit

An Indian founder may see £100,000 enter the company account and assume the company owes tax on £100,000.

That is not generally how Corporation Tax works.

Taxable profit is calculated after applying the relevant tax rules.

Potential business expenditure can include, depending on circumstances:

• software subscriptions;
• cloud hosting;
• marketing;
• professional services;
• employee costs;
• contractor costs;
• legitimate travel;
• equipment;
• accounting;
• business insurance;
• qualifying premises expenses.

But paying money out of the company does not automatically make the payment tax deductible.

The expense still has to satisfy the applicable tax rules.

5. Does the Indian Owner Personally Pay Tax on All UK Company Profits?

Not simply because they own the shares.

This is one of the most important distinctions in the article.

Imagine:

UK Ltd earns £100,000

↓

UK Ltd pays its Corporation Tax

↓

remaining funds stay inside the company

Those retained funds remain company property.

They do not automatically become the shareholder’s personal income merely because the shareholder owns 100% of the company.

That is different from the company later paying the shareholder:

• salary;
• dividend;
• interest;
• director remuneration;
• another form of distribution.

The tax consequences can change when value moves from the company to the individual.

6. Can the UK Company Retain Profits?

Generally, yes.

A company may retain post-tax profits for genuine business purposes such as:

• hiring;
• software development;
• inventory;
• advertising;
• product development;
• expansion;
• acquisitions;
• working capital;
• future investment.

But retained company funds remain company assets.

A sole shareholder should not use the company bank account as a personal wallet.

Money taken from a UK Ltd needs an appropriate basis and accounting treatment.

Depending on circumstances, this could include:

• salary;
• dividend;
• expense reimbursement;
• director’s loan.

HMRC requires proper records where directors take money out of a company, and dividends require appropriate company procedures and documentation.

7. Salary vs Dividend for an Indian Resident Director

This question cannot safely be answered with:

“Always take dividends.”

or:

“Always pay yourself salary.”

The correct treatment depends on facts.

Salary

Relevant questions can include:

• where the director lives;
• where the work is physically performed;
• whether UK PAYE applies;
• Indian employment-income treatment;
• social-security considerations;
• treaty provisions.

Dividend

Relevant questions include:

• whether the company has sufficient distributable profits;
• whether the dividend is properly declared;
• the shareholder’s Indian tax residence;
• Indian foreign-income reporting;
• any available double-taxation relief.

For an Indian-resident founder, remuneration strategy should therefore be coordinated between UK accounting advice and Indian tax advice.

8. How Are UK Company Dividends Treated for an Indian Resident?

A dividend is not the company’s operating expense.

It is a distribution to shareholders from available distributable profits.

An Indian tax resident receiving a dividend from a UK company may have Indian tax and reporting consequences because India can tax foreign-source income according to the individual’s applicable residence status.

The Indian tax-return framework contains Schedule FSI for foreign-source income. 

Therefore:

“My dividend came from my own UK company”

does not mean:

“India ignores the dividend.”

9. Does the UK Normally Deduct Tax From Ordinary Dividends Paid to an Indian Shareholder?

For the ordinary UK-company dividend scenario, the UK generally does not operate a broad dividend withholding regime comparable with many other jurisdictions.

For most non-UK residents, UK dividend income remains outside UK tax in the ordinary case, although individual circumstances and other UK income can change the analysis. HMRC’s current 2026 guidance specifically addresses the treatment of UK dividends received by non-residents.

The important practical point for an Indian shareholder is therefore often:

UK company-level Corporation Tax

↓

dividend

↓

Indian shareholder-level tax/reporting

These should not be confused.

10. Corporation Tax Paid by the Company Is Not Automatically the Shareholder’s Foreign Tax Credit

This is a subtle but crucial distinction.

Suppose:

UK Ltd pays Corporation Tax

and later:

Indian shareholder receives a dividend.

The company and shareholder are separate taxpayers.

It is therefore unsafe to assume:

“My company paid £10,000 Corporation Tax, so I personally receive a £10,000 Indian Foreign Tax Credit.”

Foreign Tax Credit depends on:

• who paid the foreign tax;
• which income was taxed;
• which taxpayer claims relief;
• the treaty;
• Indian domestic rules.

This is exactly the type of issue that should be checked with an appropriately qualified cross-border tax professional.

11. What Is the UK–India Double Taxation Agreement?

The United Kingdom and India have a comprehensive Double Taxation Convention.

The original convention entered into force in 1993 and has subsequently been amended and modified, including through the Multilateral Instrument.

HMRC continues to list the convention and synthesised treaty text as in force.

The treaty matters because a cross-border structure can create situations where both countries have a legitimate connection to the same taxpayer or income.

But the DTAA should not be misunderstood.

12. What Does the UK–India DTAA Actually Do?

The treaty does not mean:

“You choose whichever country has the lowest tax.”

It also does not mean:

“Income can never be taxed in both countries.”

Broadly, tax treaties can:

• allocate taxing rights;
• limit certain source-country taxation;
• define concepts such as permanent establishment;
• deal with residence conflicts;
• provide mechanisms for relief from qualifying double taxation.

So when GSC shows Seven Oak appearing for:

double taxation agreement

the correct answer should be precise:

The UK–India DTAA is designed to coordinate taxation between the two jurisdictions and provide relief mechanisms where qualifying double taxation occurs. It does not remove domestic reporting obligations or automatically make UK-company income tax-free in India.

That should become one of the strongest passages on the page.

13. Can an Indian Resident Claim Foreign Tax Credit?

Potentially, where the conditions are met.

India’s Income Tax Department says that a resident taxpayer claiming credit for foreign tax paid must provide the required particulars through Form 67 within the applicable timeframe. 

Useful evidence can include:

• foreign tax statements;
• tax-payment evidence;
• income records;
• dividend documentation;
• certificates;
• supporting calculations.

Foreign Tax Credit should therefore be claimed correctly, not merely assumed.

14. Schedule FSI, Schedule TR and Form 67 — How They Fit Together

This is one of the most useful parts for Indian founders.

Schedule FSI

Used to provide information about qualifying foreign-source income.

Schedule TR

Provides a summary of tax relief claimed in India for foreign taxes.

The Income Tax Department states that Schedule TR summarises the more detailed information provided through Schedule FSI.

Form 67

Used in connection with the claim for Foreign Tax Credit under the applicable rules.

A useful conceptual flow is:

Foreign income

↓

Schedule FSI

↓

Foreign-tax relief information

↓

Schedule TR

↓

Form 67 where FTC is claimed

The exact filing requirements depend on the taxpayer and year.

15. What Is Schedule FA?

Schedule FA is one of the most important India-specific issues for founders owning foreign companies.

It relates to foreign assets and foreign-source interests/income for relevant taxpayers.

The Income Tax Department’s current ITR guidance specifically states that Schedule FA requires foreign-asset or foreign-income information and that it does not apply in the same way to a person who is Non-Resident or Resident but Not Ordinarily Resident.

The Department has also recently been actively educating taxpayers on Schedules FA, FSI and TR through its compliance guidance. 

16. Owning UK Shares Can Matter Even if You Receive No Dividend

This point deserves its own section.

Suppose:

Indian resident owns 100% of UK Ltd

but:

UK Ltd pays no dividend during the year.

The founder should not automatically conclude:

“Nothing happened, therefore there is nothing foreign to report.”

The shareholding itself is a foreign equity/financial interest.

Whether and how it must be disclosed depends on the individual’s residence status and applicable Indian return requirements.

This is why:

No dividend received

is not the same as:

No foreign-asset reporting consideration.

17. What Is POEM?

POEM means:

Place of Effective Management

India’s Income Tax Department describes POEM as the place where the key management and commercial decisions necessary for the conduct of the business as a whole are made in substance.

It is therefore concerned with reality, not merely corporate paperwork.

Questions can include:

• Who sets strategy?
• Where are major decisions made?
• Where does senior management operate?
• Who approves material contracts?
• Where does the board actually exercise authority?
• Are board decisions genuine or merely formal approvals?

18. Does POEM Automatically Apply Because the Founder Lives in India?

No.

This is where many online explanations become too simplistic.

India’s Income Tax Department currently states that POEM rules apply where the foreign company’s gross turnover exceeds ₹50 crore in the relevant financial year. 

The underlying CBDT clarification states that POEM provisions do not apply to a company with turnover or gross receipts of ₹50 crore or less in the financial year. 

That means:

“The director lives in India, therefore the UK Ltd automatically becomes Indian tax resident.”

is not a sufficiently accurate explanation of the current framework.

19. Why the ₹50 Crore POEM Threshold Matters

Consider two companies.

Company A

Annual turnover equivalent:

₹2 crore

Company B

Annual turnover equivalent:

₹100 crore

Those companies should not simply be given the same POEM warning.

For many small consultants, early-stage SaaS businesses and modest online businesses, the current ₹50 crore applicability threshold is extremely relevant.

But this does not mean smaller founders can ignore every India tax issue.

POEM is only one concept.

You must still consider:

• personal tax;
• foreign assets;
• foreign income;
• Permanent Establishment;
• FEMA/ODI;
• Indian operations.

20. How Is POEM Determined for Larger Foreign Companies?

India’s current official guidance includes an Active Business Outside India framework.

Among the factors considered are:

• passive income;
• location of assets;
• employee location;
• payroll expenditure;
• board decision-making;
• senior management;
• substantive control.

The Income Tax Department stresses substance over form.

So merely holding one board meeting in London is not necessarily enough to transform an Indian-managed business into a substantively UK-managed company.

Equally, founders should not create artificial UK activity solely to manufacture a tax appearance.

21. POEM and Permanent Establishment Are Not the Same Thing

This deserves explicit separation.

So:

POEM does not apply

does not automatically mean:

the UK company can never have Indian corporate tax exposure.

22. How Could a UK Company Create a Permanent Establishment in India?

PE analysis is highly fact-specific and treaty-sensitive.

Potentially relevant facts can include:

• fixed business premises;
• personnel acting for the UK company;
• authority to conclude contracts;
• Indian operations;
• service activity;
• business conducted through India.

The UK–India treaty contains permanent-establishment provisions, and the precise application should be assessed against the actual activity rather than assumptions.

An Indian founder operating a small overseas company should therefore avoid two extremes:

“Any work from India creates a PE.”

and

“A UK incorporation certificate means India can never tax the company.”

Both can be too simplistic.

23. Indian Consultant Example

Consider an Indian marketing consultant in Bengaluru.

They own:

100% of a UK Ltd

The UK company invoices clients in:

• UK;
• EU;
• US.

The founder works from India.

Potential issues include:

UK company level

• Corporation Tax;
• accounts;
• allowable expenditure.

Individual level

• salary/dividend treatment;
• Indian foreign income;
• foreign asset disclosure.

Cross-border level

• where services are actually performed;
• whether Indian operations create PE questions;
• FEMA/ODI.

This is why a £100 Companies House incorporation does not answer the tax question.

24. Indian SaaS / AI Founder Example

Consider:

UK Ltd

↓

US and European SaaS customers

↓

Indian founder in Hyderabad

↓

developers in India

↓

cloud infrastructure internationally

Potential issues can include:

• UK Corporation Tax;
• Indian salary/dividends;
• management location;
• PE;
• IP ownership;
• related-party transactions;
• transfer pricing;
• foreign assets;
• FEMA.

For this business model, continue with our UK Company for Indian SaaS, AI & Technology Founders⁠.

25. Indian Amazon / E-Commerce Founder Example

Now consider:

Indian shareholder

↓

UK Ltd

↓

Amazon UK

↓

stock stored in Britain

This is different.

The company has a much stronger UK operational connection.

Relevant matters can include:

• UK Corporation Tax;
• UK VAT;
• inventory;
• customs;
• EORI;
• founder remuneration;
• Indian foreign-income/asset reporting.

Use our UK Company for Indian Amazon, E-Commerce & Exporters guide⁠ for the operational structure.

26. Existing Indian Pvt Ltd Owning a UK Subsidiary

This is materially different from an individual Indian founder.

Structure:

Indian Private Limited Company

↓

100% or majority ownership

↓

UK Limited Company

The tax questions can expand to:

• UK Corporation Tax;
• Indian parent tax;
• transfer pricing;
• intercompany services;
• management charges;
• royalties;
• interest;
• subsidiary dividends;
• overseas investment;
• group accounting;
• PE;
• treaty application.

Intercompany transactions should not simply be invented after money moves.

The legal agreements, commercial activity, invoices, accounting and tax treatment should all tell the same story.

27. Transfer Pricing for India–UK Group Structures

Where related Indian and UK entities transact with each other, transfer-pricing analysis may become important.

Examples:

Indian parent → software-development services → UK subsidiary

or

UK company → licence/royalty → Indian company

or

Indian company → management services → UK subsidiary

The relevant pricing and documentation should reflect commercial reality and the applicable arm’s-length rules.

This is especially relevant for established companies expanding into Britain rather than one-person startups.

28. Does a UK Ltd Give an Indian Resident a Tax Advantage?

Potentially there can be commercial and tax characteristics that make the structure attractive.

But “tax advantage” should not be treated as synonymous with “tax avoidance”.

Potential features include:

Separate legal and tax identity

The company is distinct from its shareholder.

Retention of post-tax profits

The business may retain profits for genuine reinvestment.

Established UK Corporation Tax framework

The UK currently operates the 19% small profits rate, 25% main rate and Marginal Relief framework.

International contracting structure

The UK entity can serve as the contractual party for genuine international operations.

Treaty framework

The UK and India maintain an established double-taxation convention.

None of these means:

“Open a UK company and automatically reduce Indian tax.”

29. Should You Form a UK Company for Tax Reasons Alone?

Usually, that is the wrong starting point.

The better sequence is:

Commercial objective

↓

Suitable legal structure

↓

Operational model

↓

Tax analysis

↓

Banking and payments

↓

ongoing compliance

Not:

lower tax headline

↓

create UK company

↓

work out consequences later

A company should have genuine commercial logic independent of a theoretical tax benefit.

30. Tax and FEMA Are Separate

Tax compliance does not replace foreign-exchange compliance.

If an Indian resident acquires or funds shares in an overseas company, India-side FEMA and Overseas Investment rules can separately matter.

That is why the following are distinct questions:

Can Companies House register the company?

Can I legally acquire/fund the shares from India?

How will the company and shareholder be taxed?

For the investment/remittance layer, use our Indian Founder’s FEMA, RBI & Overseas Investment Guide⁠.

31. Tax and Banking Should Also Tell the Same Story

Suppose the bank application says:

“The founder invested £20,000 personally from India into the UK company.”

The accounting and regulatory records should support that explanation.

Likewise, if the bank sees:

UK company → Indian founder → repeated large transfers

the accounting basis should be identifiable.

Those payments might be:

• salary;
• dividends;
• reimbursement;
• loan repayment;
• director loan;
• contractor payment.

Calling everything “transfer to owner” is not good financial governance.

For banking, use our UK Business Bank Account for Indian Residents — 2026 Guide⁠.

32. Foreign Asset Reporting Should Be Considered Before Filing the Indian Return

An Indian founder may hold:

• UK company shares;
• a foreign company directorship;
• overseas financial accounts;
• foreign income.

That may change which Indian return and schedules are appropriate.

The Income Tax Department specifically warns taxpayers with foreign assets against using simplified returns that do not accommodate those disclosures.

This is one reason an international founder’s personal tax filing can become more complex after UK incorporation even if the company itself is small.

33. Five Tax Mistakes Indian Owners of UK Companies Should Avoid

Mistake 1 — “The company paid UK tax, therefore I owe nothing in India.”

Company-level and shareholder-level tax are different.

Mistake 2 — “I live in India, so India automatically taxes all UK company profits.”

Too simplistic.

Mistake 3 — “POEM applies to every one-person UK company.”

The current Indian POEM framework contains the important ₹50 crore applicability threshold.

Mistake 4 — “No dividend means nothing to disclose in India.”

Foreign share ownership can itself create reporting considerations.

Mistake 5 — “The DTAA means I never pay tax twice.”

The treaty provides rules and relief mechanisms. It does not remove filing or claiming requirements.

34. The India–UK Tax Decision Framework

Before operating the UK company, answer these questions.

Company

• Where was it incorporated?
• What does it sell?
• Where are customers?
• Where are employees?
• Where are contractors?
• Where is inventory?
• What are taxable profits?

Management

• Who makes strategic decisions?
• Where?
• Who approves contracts?
• Where does the board genuinely function?

Shareholder

• What is the founder’s Indian tax-residence status?
• Is salary received?
• Are dividends received?
• Are foreign shares held?
• Are foreign accounts controlled?

Cross-border

• Does the company operate through India?
• Are related Indian companies involved?
• Are there intercompany payments?
• Is Foreign Tax Credit potentially relevant?

That is a far more useful framework than asking simply:

“What tax percentage will I pay?”

Frequently Asked Questions

Is a UK company tax-free for an Indian resident?

No. The UK company can have UK Corporation Tax obligations, while its Indian owner can separately have Indian tax and reporting obligations.

What Corporation Tax rate does a UK Ltd pay in 2026?

The small profits rate is 19% for qualifying companies with profits of £50,000 or less, the main rate is 25% above £250,000, and Marginal Relief can apply between the two thresholds.

Does the UK company pay tax on revenue or profit?

Corporation Tax generally applies to taxable profits calculated under the applicable rules, not simply gross revenue.

Does an Indian resident personally pay tax on all retained company profits?

Not simply because they own the shares. A UK Ltd is a separate legal and taxable entity.

Can the company retain profits?

Generally, yes, after dealing with applicable company tax and liabilities.

Are dividends from my UK company taxable in India?

For an Indian resident, foreign dividend income can have Indian tax and reporting consequences depending on residence status and circumstances.

Does the UK normally deduct tax from an ordinary dividend paid to an Indian resident?

In the ordinary UK-company dividend scenario, the UK generally does not operate a broad withholding regime for non-resident shareholders. Individual facts should still be checked.

What is POEM?

Place of Effective Management concerns where the company’s key management and commercial decisions are made in substance.

Does POEM apply to every UK company owned from India?

No. The Income Tax Department currently states that POEM rules apply where a foreign company’s gross turnover exceeds ₹50 crore in the financial year.

Is POEM the same as Permanent Establishment?

No. POEM concerns corporate residence. PE concerns taxable business presence.

Can India tax a UK company’s profits?

Potentially, where Indian residence, PE or other Indian tax rules apply to the facts.

What is Schedule FA?

Schedule FA concerns foreign assets and income for applicable Indian resident taxpayers.

Do I need Schedule FA if I own shares in a UK Ltd?

Potentially, depending on your Indian tax-residence status and applicable filing requirements.

What is Schedule FSI?

It is used by relevant residents to report income arising from foreign sources.

What is Schedule TR?

Schedule TR summarises foreign-tax relief claimed in India and draws on the detailed information in Schedule FSI.

What is Form 67?

Form 67 is used by applicable resident taxpayers when claiming Foreign Tax Credit under India’s rules.

Does the UK–India DTAA eliminate double taxation automatically?

No. It establishes treaty rules and potential relief mechanisms. Relief still depends on the relevant taxpayer, income, treaty provision and filing requirements.

Can I pay myself salary while living in India?

Potentially, but salary taxation depends on the actual circumstances, including where work is performed and applicable treaty/domestic rules.

Can I take dividends instead?

Potentially, if the company has sufficient distributable profits and follows the correct corporate process.

Should I form a UK company purely to save tax?

A company should generally have genuine commercial and operational reasons. Cross-border tax consequences should be assessed before relying on any perceived tax advantage.

Continue Through the India–UK Knowledge Hub

For incorporation itself:

UK Company Formation from India — Complete 2026 Guide⁠

For formation costs:

UK Company Formation Cost from India — 2026 Fees⁠

For overseas investment and remittances:

FEMA, RBI & Overseas Investment Rules for UK Companies⁠

For banking:

UK Business Bank Account for Indian Residents⁠

For SaaS and technology:

UK Company for Indian SaaS, AI & Technology Founders⁠

For e-commerce:

UK Company for Indian Amazon, E-Commerce & Exporters⁠

Final Perspective

The most important lesson for an Indian resident owning a UK Limited Company is that there is no single number called:

“UK company tax for Indians.”

Instead, there can be several separate layers.

UK company profit

Potentially subject to UK Corporation Tax.

Money received personally

Salary, dividends and other income can have Indian personal-tax consequences.

Foreign ownership

UK shares can create foreign-asset disclosure considerations.

Company management

For sufficiently large foreign companies, POEM can become relevant.

Indian business activity

A Permanent Establishment question can arise independently of POEM.

Income exposed to taxation in both jurisdictions

The UK–India DTAA and Foreign Tax Credit framework can become relevant.

The sustainable question is therefore not:

“How can I use a UK company to avoid Indian tax?”

It is:

“How should my UK company, Indian ownership, management, reporting and money flows be structured so that the business operates coherently across both jurisdictions?”

That is the question a serious international founder should answer.

Need Help Reviewing Your India–UK Company Structure?

Review My India–UK Structure

For Indian founders who already own a UK company and want to understand which areas of their structure should be reviewed with UK and Indian accounting/tax professionals.

Start My UK Company With Cross-Border Structure in Mind

For Indian founders who have not yet incorporated and want the UK company, ownership, addresses, FEMA considerations and operational setup considered together from the outset.

About the Author

Isaac Jackson
Founder & Managing Director — Seven Oak Prestige Ltd

Isaac Jackson has 3+ years of hands-on experience supporting international entrepreneurs with UK company formation and business-establishment matters.

Seven Oak Prestige has supported close to 100 UK company formation and establishment cases, including non-resident founders requiring assistance with corporate structure, Companies House compliance, banking readiness and international business setup.

Editorial Methodology

This guide is prepared using a combination of primary UK and Indian regulatory sources, current cross-border research, practical international-founder experience and ongoing editorial review.

We prioritize official information published by HMRC, GOV.UK and the Income Tax Department of India when explaining Corporation Tax rates, company residence, POEM, foreign-income reporting, Foreign Tax Credit and UK–India treaty matters.

We also review recurring questions raised by Indian founders so that the guide addresses practical issues such as company/shareholder separation, dividends, retained profits, foreign assets, management location and cross-border reporting.

Because tax rules and administrative guidance can change, material regulatory information is periodically reviewed and updated where necessary.

Last reviewed: 01 September 2026

Editorial Disclaimer

This guide provides general educational information and does not constitute personalized UK or Indian tax, legal, accounting, investment or regulatory advice.

Cross-border taxation depends heavily on facts including:

• tax residence;
• company activity;
• management location;
• shareholder structure;
• income type;
• permanent establishment;
• group relationships;
• applicable treaty provisions.

Seven Oak Prestige provides UK company-establishment and corporate-support services. Where specialist UK or Indian tax analysis is required, advice should be obtained from appropriately qualified professionals in the relevant jurisdiction.

Primary Official Sources Reviewed

HMRC — Corporation Tax Rates and Allowances
Confirms the 19% small profits rate, 25% main rate and Marginal Relief framework for 2026.

Income Tax Department of India — Residential Status & POEM
Confirms the current POEM framework, substance-over-form approach and ₹50 crore gross-turnover applicability threshold.

Income Tax Department — ITR-2 Guidance
Explains Schedules FSI, TR and FA.

Income Tax Department — Form 67
Explains Foreign Tax Credit filing for applicable resident taxpayers.

HMRC — UK–India Tax Treaty
Provides the current UK–India Double Taxation Convention and MLI-synthesized text.