Advising Global Indian Families in a Shifting UK Landscape with Edwin Coe

Leading advisors gathered at London's Four Seasons Hotel for an exclusive roundtable discussion examining the evolving challenges and opportunities facing global Indian families in light of recent UK tax and immigration reforms.

Hosted by law firm Edwin Coe, the event brought together tax specialists, wealth managers, fiduciary providers, and immigration experts to discuss how the abolition of the non-domicile regime and proposed changes to settlement rules are reshaping planning strategies for internationally mobile Indian families.

The Three Client Categories

Hetal Sanghvi, Tax Partner and Head of Edwin Coe's India Desk, identified three distinct categories of Indian families responding differently to the reforms. Long-term UK residents are primarily focused on mitigating inheritance tax risk, with many turning to the UK-India tax treaty for relief. Meanwhile, newer residents in their first five years are carefully weighing whether to remain until becoming long-term residents or exit before the ten-year threshold.

The third category—prospective residents—are employing sophisticated tax residency planning to delay their arrival, maximizing the limited four-year window of the new Foreign Income and Gains (FIG) regime. "There was a client introduced last week who is five years away from relocating to the UK," Sanghvi noted, "but the conversation is already about planning for significant inheritances from founding family wealth in India."

The Reality of Exits: Not as Doom and Gloom?

While headlines trumpet a mass exodus, the reality on the ground appears more nuanced. Tax advisors reported that among established international clients with settled jobs and deep UK roots, actual departures remain relatively low. These families are focusing instead on succession planning and gifting strategies, content with their UK base.

The younger demographic—clients in their 40s and 50s pursuing active capital growth—showed higher exit rates, with Dubai emerging as the preferred destination. However, one participant noted an unexpected trend: domestic UK clients expressing fear of "missing the boat" after watching peers relocate following business sales. "Their tax positions haven't really changed fundamentally," one advisor observed, "but there's a real fear of the current government and potential tax changes to come."

The challenge for those attempting to break residence through day-counting and Dubai visits is significant. Advisors warned that many will inadvertently trigger UK tax residency despite protests about leaving, particularly given increased information sharing through the Common Reporting Standard (CRS) and HMRC's growing inquiry activity.

The Four-Year Window Challenge

The restricted four-year FIG period emerged as a central concern, with participants acknowledging it provides insufficient time for families to establish themselves before worldwide taxation applies. However, this limitation has sparked creative planning around business restructuring and wealth transfers during that window, particularly for next-generation family members pursuing education or business interests in the UK.

One innovative approach involves accelerating inheritance planning conversations with Indian-resident patriarchs and matriarchs. "We're not just talking about the wealth that family members have now," Sanghvi explained, "but actually planning for wealth they'll inherit, because there's significant value we can add before they even arrive in the UK."

Despite political and tax concerns, education remains a powerful pull factor. The UK legal system, law enforcement, and prestigious schools continue to attract families, even as they navigate an increasingly complex immigration landscape. For emerging market families, particularly from India, sending children overseas for secondary school or university education remains an almost universal expectation in the high-net-worth space.

Immigration: The Missing Pieces

Sundeep Rathod, Head of Immigration at Edwin Coe, highlighted the significant impact of proposed changes extending settlement eligibility from five to ten years. "Extending the residency period from five years to ten years is a massive push factor for our clients," he explained, noting the uncertainty around whether changes will apply retrospectively to families already partway through their qualifying period.

The closure of the Tier 1 Investor visa in 2022 left a critical gap in the UK's immigration framework. The route had proved particularly effective for Indian families, who could fund the previous £2 million requirement relatively easily once achieving non-resident status, given India's capital control restrictions allowing £1 million remittances.

While rumours circulate about a potential return requiring £5 million investment in specific sectors like AI, clean energy, or life sciences, the current political climate makes such announcements unlikely in the near term. "Is the government really going to introduce a visa designed to attract wealthy individuals in this current climate?" Rathod questioned. "We just can't see it happening."

Alternative routes through skilled worker sponsorship have also tightened, with increasing refusals where family offices seek to sponsor beneficial owners—a practice the government now characterizes as "self-sponsorship" contrary to the spirit of the rules.

The Dubai Alternative and Global Comparisons

Wealth managers reported Dubai as the primary beneficiary of UK exits, particularly among the ultra-high-net-worth demographic with maximum global mobility. One participant who has managed Indian client segments for decades noted that the top end of the wealth spectrum—those worth hundreds of millions or billions—can move between jurisdictions in hours with their own aircraft.

"Dubai has seen the highest immigration of millionaires in the last year, we're talking tens of thousands," one advisor noted, attributing this to attractive tax regimes and economic growth. However, several participants acknowledged that many departing clients express genuine reluctance about leaving UK lifestyles, fresh air, and legal protections, viewing the move as financially driven rather than preferential.

The comparison with US wealth creation proved stark. One participant observed that since Brexit, several major US tech companies individually boast market capitalisations exceeding the UK's entire GDP, with Nvidia alone valued at $4.8 trillion. This wealth generation disparity, combined with stagnant UK economic growth, creates a challenging environment where government revenue pressures inevitably lead to increased taxation.

Compliance, Transparency and Risk Management

The temporary repatriation facility (TRF) offering 12% tax rates on remitted funds generated interest, particularly for families with complex "mixed fund" arrangements requiring clean capital analysis. However, uptake remains cautious. Advisors noted that the new FIG regime requires significantly more disclosure than the old remittance basis, with taxpayers having to state specific sources of foreign income and gains they're excluding.

"There's probably an element of families wanting to see how it works in practice," Sanghvi suggested, noting concerns about raising HMRC risk profiles. CRS-driven transparency has fundamentally shifted conversations from "how will they know?" to security and privacy concerns, particularly for families in jurisdictions where large distributions might trigger unwanted tax authority attention despite no actual liability.

Advisors reported restructuring some arrangements specifically to minimise CRS reporting volumes, including creating sub-funds and multiple trust structures to avoid disclosing substantial aggregate numbers that could create security risks in beneficiaries' resident jurisdictions.

Professionalisation and Family Office Growth

The discussion revealed dramatic growth in India's family office sector, expanding from approximately 35 in 2018 to over 300 today, with thousands more operating informally. This proliferation reflects increasing sophistication among Indian families exposed to Western wealth management practices, as well as the complexity of managing multi-jurisdictional assets under new transparency regimes.

Participants noted that conversations once considered taboo—matrimonial risk, succession planning, and mortality—are now commonplace. COVID appears to have accelerated families' awareness of succession planning urgency. "Families are now having conversations that five years ago you simply couldn't have," Sanghvi reflected. "Sitting around the table discussing the patriarch or matriarch passing away was previously more difficult, but now families are proactive about ensuring plans are in place."

Indian law firms have evolved similarly. Major practices that a decade ago employed just two partners handling private client matters now maintain teams of 20-30 partners, reflecting formalised demand for sophisticated wealth advisory services.

Indian trusts are gaining traction as planning tools, particularly for structures established by Indian-resident patriarchs for UK-resident beneficiaries. These arrangements can protect inherited assets from UK inheritance tax, provided settlors never become UK tax resident, though advisors must navigate technical challenges around tax credit mismatches.

Family charters generated mixed views. While conceptually valuable, several participants noted they often become static documents "shoved in a drawer" rather than living frameworks. Success depends on genuine multi-generational engagement and buy-in, with increased family professionalisation creating better conditions for effective implementation.

The London Property Market

Despite headlines suggesting market collapse, real estate advisors reported continued activity at the ultra-high-end, with £20-30 million transactions occurring regularly in prime central London, often conducted discreetly. One advisor noted that three transactions this year totalled £200 million, claiming "no other city in the world could account for that."

The market has become a "buyer's market" and "the best value proposition globally," particularly as Dubai prices surge after substantial recent returns. Wealth advisors noted that aspiration demand from India's expanding tier-two and tier-three cities remains strong, even as buyers may not intend to live in London full-time.

However, significant barriers persist. Stamp duty has become so complex that advisors now refer clients to specialists rather than attempting calculations themselves. Annual Tax on Enveloped Dwellings (ATED) has particularly impacted higher-end transactions. Most critically, interest rates near 4%—compared to 1% several years ago—have quadrupled borrowing costs. "If rates dropped from 4% to 1% tomorrow, I almost guarantee there would be an influx of buyers into the London market," one property advisor predicted.

Looking Forward

The consensus among participants emphasised that while the UK faces genuine challenges in attracting and retaining global Indian families, deep-rooted relationships, educational excellence, and legal system strength provide enduring appeal. Paradoxically, the UK's ease of exit—with no exit taxes and straightforward administrative processes—provides flexibility that other jurisdictions lack, allowing families to leave and potentially return with minimal tax costs.

Success in this environment requires earlier planning conversations, sophisticated multi-jurisdictional coordination, and increasingly formal family governance structures. The collaborative nature of modern wealth advisory became a recurring theme, with participants emphasising that families need integrated teams spanning tax, legal, immigration, banking, and fiduciary services across multiple jurisdictions.

As Sean Bannister, Head of Tax at Edwin Coe, concluded: "We are dealing with the greatest transfer of wealth there has ever been between generations and from public to private sectors. These families have very good problems—but they are problems that require collaborative, expert solutions. The nature of wealth is at such a higher level now that it demands more sophisticated, coordinated advisory approaches than ever before."