An Indian family can own a London flat, but how it pays for it depends on where it lives. A resident of India remits under the Liberalised Remittance Scheme, USD 250,000 per person per year with 20 per cent collected at source above ₹10 lakh; an NRI in the Gulf pays from Gulf funds with no limit. This guide to buying London property from India covers both, then the UK stamp duty, rent tax and the treaty.
Buying from abroad
Buying London property from India: the LRS limit, 20% TCS, NRIs in the Gulf and the UK tax
Two kinds of Indian buyer: residents of India and Gulf NRIs
A resident of India buys a London property with money sent under the Liberalised Remittance Scheme: USD 250,000 per family member per financial year, pooled across co-owners, with 20 per cent tax collected at source on remittances above ₹10 lakh and credited against Indian income tax. An NRI living in the Gulf is outside LRS and pays from Gulf or NRE funds without a cap. Both pay UK stamp duty with the 5 per cent additional-dwelling and 2 per cent non-resident surcharges, and UK tax on rent and on gains, with credit under the India–UK treaty.
The firm’s Indian clients fall into two groups that face different rules. The first lives in India: a Mumbai or Delhi family buying a flat for a child at a London university, or a professional building an asset outside the rupee. Their money leaves India under the Reserve Bank’s Liberalised Remittance Scheme, which caps what each person can send and taxes it on the way out.
The NRI in the Gulf buying London property
The second group lives in the Gulf: the millions of Indian nationals in Dubai, Abu Dhabi, Doha, Riyadh and Kuwait whose salaries are paid in dirhams and riyals. They are non-residents of India, outside LRS, and buy London property on the same footing as any Gulf resident.
Why resident and NRI buyers follow different rules
Nearly every difficulty the firm has seen with an Indian purchase comes from mixing the two: an NRI trying to use an Indian resident relative’s LRS allowance, or a resident family that finds the LRS cap will take three years to fund a £600,000 flat. Settle which rules apply before a property is chosen. The UK side, from the surcharges to the rent tax, is the same for both and is covered in the second half of this guide.
The rules in one page
For a resident of India the questions are, in order: how much can the family send this year and next, what tax is collected on the way, and how the property is disclosed afterwards. For an NRI they are the UK questions only. The sections that follow take each in turn, and our general guide to buying London property from the Gulf covers the ground common to every overseas buyer.
The LRS limit for buying property abroad from India
Under the Liberalised Remittance Scheme a resident individual, including a minor, may remit up to USD 250,000 in each financial year running April to March for permitted capital and current account purposes, and acquiring immovable property outside India is a permitted capital account purpose under the Foreign Exchange Management (Overseas Investment) Rules 2022. The limit is per person, not per family. At 1.33 dollars to the pound USD 250,000 is about £188,000.
Pooling the LRS limit across family members as co-owners
The Reserve Bank’s guidance allows family members’ remittances to be clubbed for a capital account purchase where the members are co-owners of the asset. A couple with two children can therefore send USD 1 million, about £750,000, in one financial year, provided all four names go on the title. A minor’s remittance form is countersigned by the natural guardian. Our guide to buying with family and a declaration of trust explains how the English title records the shares.
Using two financial years of LRS limits for one purchase
A purchase that exchanges in March and completes in April can draw on two years’ limits, so a family of four can in principle fund £1.5 million across a well-timed exchange and completion. The deposit on exchange is usually 10 per cent, and the balance is due on completion, so the conveyancing timetable in our guide to conveyancing week by week should be planned around 31 March.
What LRS will not do
An Indian bank may not lend to fund an LRS capital account remittance, so the money must be the family’s own. A UK mortgage is a separate matter: a non-resident can borrow in London, as our guide to buy-to-let mortgages for non-UK residents explains, which stretches the LRS allowance to a deposit rather than the whole price. The remitting bank will need the PAN, a Form A2 declaration of purpose, and evidence of the property contract.
TCS at 20 per cent on LRS property remittances
Since 1 April 2025 the remitting bank collects tax at source on LRS remittances above ₹10 lakh in a financial year. For a property purchase the rate is 20 per cent of the amount above the threshold; lower rates apply only to education and medical remittances. The collected tax is not an extra cost in the end: it appears in the remitter’s Form 26AS and is set against the year’s Indian income tax, with any excess refunded on the return.
The cash-flow effect of TCS on a London purchase
A family sending USD 1 million has roughly a fifth of the amount above ₹10 lakh collected on the way out, which it recovers only when the Indian returns are filed and processed the following year. The property budget must therefore allow for 20 per cent more cash leaving the bank than arrives in London. A family whose Indian tax liability is smaller than the TCS waits for the refund; one with large Indian income simply pays less advance tax.
The collection is on the remitter, so where four family members remit, four collections and four returns follow. Co-owners should each keep the bank’s TCS certificate with the completion statement from the London solicitor. The resident family’s side:
- PAN and Form A2: for each remitting family member, purpose stated as acquisition of immovable property abroad.
- Property contract: the exchanged contract or reservation agreement naming the co-owners.
- Source of funds: Indian bank statements and tax returns, which the London solicitor will also ask for under the anti-money-laundering checks.
- TCS certificates: one per remitter, kept for the Indian return.
- Co-ownership evidence: the English title and declaration of trust showing each remitter’s share.
- Apostille: India has been in the Hague Apostille Convention since 2005, so a power of attorney or identity document is apostilled by the Ministry of External Affairs, not legalised through the embassy.
NRIs in the Gulf: buying London property outside LRS
An Indian national who is non-resident in India under the Income-tax Act, in practice one who lives and works in the Gulf, is not a resident individual for LRS and the scheme does not apply. Money earned in Dubai or Doha and held in a Gulf bank, or in an NRE account in India, can be sent to London without a cap or TCS. The transfer runs like any Gulf buyer’s, as our guide to moving money from the Gulf and our guide on converting dirhams and riyals to sterling set out.
Why NRO account funds are treated differently from Gulf funds
Rupee income earned in India and held in an NRO account, rent from a Mumbai flat for instance, is repatriable only up to USD 1 million a financial year with a chartered accountant’s certificate on Form 15CB and tax paid. An NRI buying in London from Indian rupee income should budget for that process; one buying from Gulf salary need not. The two sources are best kept in separate accounts so the London solicitor’s source-of-funds file is clean.
The Indian residency test and when LRS applies again
An NRI who spends long periods in India can become resident again and fall back under LRS for the following year. The Income-tax Act’s day counts, 182 days in the year or 60 days with 365 in the preceding four, with the relaxations for those working abroad, decide it; the Indian adviser should confirm status before a large remittance. The UK has its own test, covered in our guide to UK tax residence and summers in London, and an Indian family that buys for a child studying here should read both.
UK stamp duty and surcharges for Indian buyers
Stamp Duty Land Tax is the same whichever Indian rule funded the money. A buyer who already owns a home anywhere, which includes a flat in Mumbai, pays the 5 per cent additional-dwelling surcharge on the whole price, and a buyer who has spent fewer than 183 days in the UK in the year before completion pays the 2 per cent non-resident surcharge on top. The two stack. The table shows the result at three prices.
SDLT for an Indian buyer who owns a home in India, 2026
| Price | Resident in UK, owns a home elsewhere | Non-resident, owns a home elsewhere |
|---|---|---|
| £500,000 | £40,000 | £50,000 |
| £1,000,000 | £93,750 | £113,750 |
| £2,000,000 | £253,750 | £293,750 |
Source: GOV.UK SDLT residential rates, bands 0/2/5/10/12 per cent plus 5 per cent additional-dwelling and 2 per cent non-resident surcharges; firm’s calculation, October 2026.
Our stamp duty guide for overseas buyers explains the bands, and our refunds guide covers the two reclaims: the 2 per cent is refundable if the buyer spends 183 days in the UK in the year after completion, and the 5 per cent if a main home elsewhere is sold within three years. A child who owns nothing and buys in their own name pays neither the 5 per cent nor, after a year’s study, the 2 per cent; our guide to buying a flat for a student child works through that case.
Tax on rent and on sale
Rent from a London flat is taxed in the UK first. A letting agent deducts basic-rate tax at source unless HMRC approves the owner under the Non-Resident Landlord Scheme, after which the owner files a UK return; our NRL guide walks through the form. Each co-owner has a UK personal allowance of £12,570, which for a family of four on the title shelters about £50,000 of rent a year before UK tax starts.
How the India–UK tax treaty applies to London rent
The India–UK double taxation convention gives the UK the first right to tax income from UK property and gains on its sale, and India gives credit for UK tax paid against the Indian tax on the same income. A resident of India therefore declares the London rent in the Indian return and claims the UK tax as credit; an NRI in the Gulf has no Indian tax on foreign income and pays UK tax only. Our guide to letting and managing from the Gulf covers the practical side.
UK capital gains tax and inheritance tax for non-residents
A non-resident who sells pays UK capital gains tax at 18 or 24 per cent on the gain since purchase, with a £3,000 annual exemption, and must file a return within 60 days of completion whether or not tax is due, as our guide to selling as a non-resident explains. UK inheritance tax applies to UK property whoever owns it, at 40 per cent above the £325,000 nil-rate band; an English will and the planning in our inheritance tax guide apply to an Indian family exactly as to a Gulf one.
Disclosing a London property in India: Schedule FA
A resident of India must report foreign assets, including a London flat and the UK bank account its rent is paid into, in Schedule FA of the Indian income tax return every year, and the rent in the income schedules. Non-disclosure is an offence under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 with penalties that far exceed the tax. The London solicitor’s completion statement, the title and the UK tax return are the documents the Indian adviser will need each year.
An NRI has no Schedule FA obligation while non-resident but acquires one on returning to India as a resident; our guide for Gulf expatriates who buy now and move later deals with the UK side of a change of residence, and the Indian side deserves the same planning. The single rule that avoids trouble:
Keep the money trail in one line: the Indian or Gulf bank that sent the funds, the Form A2 or NRE statement, the London solicitor’s client account, the completion statement and the Land Registry title, all in the same names in the same shares. Every later question, from the UK solicitor’s source-of-funds check to Schedule FA, the TCS credit and the eventual sale, is answered from that file. Buyers who route money through relatives, friends or third-country accounts create the problems the firm is most often asked to undo.
The London purchase process for Indian buyers
The London process is the same as for any overseas buyer and our guides cover it: due diligence from abroad, buying without travelling, and leasehold or freehold. Three points are particular to Indian buyers.
Where Indian families buy property in London
The Indian community’s established districts are in north-west and west London, Wembley, Harrow, Hounslow and Southall, where prices are a third of central London’s and the firm’s Indian clients with family already here often start. Investors and parents of students buy where every overseas buyer does: Canary Wharf, Bloomsbury for UCL and LSE, and Kensington for Imperial. Our guide on what a budget buys in London gives the ladder.
Visiting and viewing London property from India
Indian nationals need a Standard Visitor visa, £135 for up to six months, to view and complete in person; most clients complete through a power of attorney apostilled in India instead. Flights from Mumbai and Delhi to Heathrow are under ten hours, and from the Gulf under eight.
Opening a UK bank account as an Indian buyer
A UK bank account for rent and outgoings is the slowest step for an Indian buyer, as our guide to opening a UK account as a non-resident explains; the international arms of the Indian banks in London and the Gulf banks’ UK branches are the usual answers.
Our view on how to buy property in London from India
For a family resident in India, the LRS arithmetic decides the budget: USD 250,000 per co-owner per year, pooled, timed across 31 March, with 20 per cent more cash leaving India than arrives and recovered through the returns. On that basis a family of four can buy a £700,000 flat in one year or £1.5 million across two, in all four names, and should plan the purchase around those dates rather than around a property it has fallen for.
For an NRI in the Gulf the Indian rules fall away and the UK rules are the whole story: the surcharges, the rent tax, the 60-day CGT return and the will. The firm’s Indian clients in Dubai buy exactly as its Emirati clients do, and the only Indian question left is what happens if they go home. In both cases the file should be kept in one line, and we will say which flats we would buy with it.
Sources: Liberalised Remittance Scheme FAQs (Reserve Bank of India) · Income Tax Department, India (TCS on LRS remittances from 1 April 2025) · Stamp Duty Land Tax rates (GOV.UK) · India–UK double taxation convention (GOV.UK) · Apostille Convention status table (HCCH) · Standard Visitor visa (GOV.UK). Indian tax and exchange-control rules change at each Union Budget; an Indian chartered accountant confirms the position for the family. General information, not legal or tax advice. Figures verified 15 October 2026.
Frequently Asked
Questions about buying from India
Yes. Acquiring immovable property abroad is a permitted purpose under the Liberalised Remittance Scheme, within USD 250,000 per resident individual per financial year (April to March). A family pools its members’ limits where they are co-owners on the title.
Since 1 April 2025, 20 per cent of LRS remittances above ₹10 lakh in a financial year for purposes other than education and medical treatment. It is credited against the remitter’s Indian income tax and refunded if it exceeds the liability, so it is a cash-flow cost, not a final one.
No. LRS applies to resident individuals under India’s exchange-control rules. An NRI living and working in the Gulf remits Gulf earnings or NRE funds to London without the USD 250,000 cap or TCS. Rupee income in an NRO account is repatriable up to USD 1 million a year with a chartered accountant’s certificate.
Not for an LRS capital account remittance; Indian banks may not lend for it. A UK mortgage from a lender that serves non-residents is the usual way to stretch the allowance, with LRS funding the deposit.
The standard bands plus 5 per cent if the buyer owns a home anywhere, including in India, and 2 per cent if non-resident in the UK: £113,750 on a £1 million flat, £293,750 on £2 million. The 2 per cent is refundable after 183 UK days in the following year.
No. The UK taxes the rent first, with a £12,570 personal allowance per owner; a resident of India declares it in the Indian return and claims credit for the UK tax under the India–UK treaty. An NRI in the Gulf pays UK tax only.
A resident of India reports it, and the UK bank account, in Schedule FA of the annual return; penalties for non-disclosure under the Black Money Act 2015 are severe. An NRI has no Schedule FA obligation while non-resident but acquires one on becoming resident again.
Yes, once apostilled. India joined the Hague Apostille Convention in 2005, so the Ministry of External Affairs apostille replaces embassy legalisation. The London solicitor drafts the power to English requirements before it is signed in India.
Yes, and it often saves tax. A child who owns no other property pays no 5 per cent surcharge, and after a year’s residence no 2 per cent surcharge. Under LRS a minor’s remittance counts within the minor’s own USD 250,000, countersigned by the guardian.
