Inherited property India NRI cases like this one show why paperwork, not misfortune, decides who keeps ancestral land. When Randhir Singh, an NRI living in the United Kingdom, tried to reclaim his family’s 17-acre plot in Bhundri village near Ludhiana, he found his own brother had occupied it for years, while unrelated encroachers held the ancestral house separately.
Only after his complaint reached Punjab’s state ministry for NRI affairs, and the minister ordered an eviction, did Singh recover the land in early March 2025, with the house eviction still pending. Officials in that ministry alone say they have resolved more than 3,200 similar grievances over the previous three years, evidence that gaps in paperwork and absent ownership, not bad luck, are what leaves inherited property in India exposed.
For Indian-origin Britons, the problem usually starts long before any dispute over land, with which law governs the inheritance. That depends on religion, not geography. Hindus, Buddhists, Jains and Sikhs inherit under the Hindu Succession Act. Christians and Parsis fall under the Indian Succession Act, which typically requires a grant of probate. Muslim inheritance follows uncodified personal law that caps how much of an estate can be freely willed away without the other heirs’ consent. Assuming a UK will settles the question on its own is where many cross-border estates stall.
The second fork is whether a will exists at all. A testate estate, one with a valid will, may still need probate before assets can be transferred. An intestate estate generally requires a succession certificate for bank accounts, shares and other movable assets, and a separate legal heir certificate for the everyday business of proving identity to a housing society, a utility provider or a land registry office.
What is the difference between a succession certificate and a legal heir certificate?
A succession certificate is issued by a civil court and authorises an heir to collect debts, securities and other movable assets belonging to someone who died without a will. A legal heir certificate is simpler, usually issued by a local revenue authority, establishing who the surviving heirs are for practical purposes such as updating property records or claiming a pension. Heirs frequently need both, and neither substitutes for the other.
Beyond those, anyone managing an inheritance from Britain should assemble a death certificate, the original will and probate order where one applies, the property’s title deed, and a certificate confirming the land carries no unpaid loans or disputed claims. A PAN card, India’s tax identification number, is required for almost any formal transaction, including a sale.
Because most UK-based heirs cannot be present for every signature, a power of attorney is common for remote management, though its execution and attestation requirements are strict enough to confirm with a solicitor on each side. The risk is not hypothetical: cases have surfaced of a power of attorney used to sell an NRI’s property outright without the owner’s knowledge, which is why it should be narrowly scoped and independently verified rather than treated as a formality.
There is genuinely good news to set against the paperwork. India abolished estate duty in 1985, and no inheritance tax applies to Indian property today, whatever periodic commentary about reviving one might suggest. None has been enacted. Britain does not tax the act of inheriting a foreign asset either. What both countries tax is what happens next.
This is where the 6 April 2025 change to inherited property India NRI rules matters most. Until then, the tax authority excluded a deceased person’s foreign assets, including Indian property, from UK inheritance tax largely on domicile, broadly whether India, not Britain, was where they were permanently settled.
That test has now moved to a long-term UK residence basis. Someone who had lived in the UK for long enough before they died can now have their worldwide estate, Indian property included, drawn into UK inheritance tax, even if they always considered India home. The old shorthand that non-domiciled status automatically kept Indian assets outside the UK tax net no longer holds.
Selling the property later brings tax on both sides. India charges capital gains tax based on what the original owner paid and when. Under the 2024 budget rules, property bought on or after 23 July 2024 is taxed at a flat 12.5 percent with no inflation adjustment. Property bought earlier can generally choose between that flat rate and 20 percent with indexation, whichever is lower, though exactly how that choice applies to non-resident sellers has not been independently confirmed and is worth checking with an adviser.
Withholding tax adds a further, recent complication. The provision requiring tax withheld at source on payments to non-residents, long known as Section 195, has been renumbered to Section 393(2) under India’s new Income-tax Act 2025, in force from 1 April 2026.
Advisers report the withholding rate for non-resident sellers runs far higher than the roughly 1 percent deducted from resident sellers, in the region of 30 percent on short-term gains and around 20 percent plus surcharge on long-term gains, though these figures come from tax practitioners rather than the legislation itself. A lower or nil-deduction certificate can be sought from the tax department ahead of a sale to avoid overpayment, a step advisers describe as essential.
Once proceeds reach the UK, a further layer applies to anyone who is UK tax resident: capital gains tax on the increase in value since inheritance, calculated using the property’s probate or market value at that date, converted at the exchange rate on the day of death.
UK capital gains tax on residential property currently sits at 18 percent within the basic rate band and 24 percent above it, with the first £3,000 of gains per person exempt. Tax already paid in India on the same gain can generally be offset against the UK bill through a foreign tax credit claimed on the Self Assessment return, up to the UK tax otherwise due, though this rests on double taxation relief provisions worth confirming with an adviser.
Getting the money home is capped, too. Once Indian taxes are settled, the Reserve Bank of India permits repatriation of up to USD 1 million per financial year from the sale of inherited assets, paid through the same authorised bank used for the transaction.
None of this is uniformly bad news, and it would be dishonest to present it that way. The absence of Indian inheritance tax remains a genuine advantage over jurisdictions that charge death duties outright. The nil-deduction certificate process exists precisely to stop non-resident sellers being over-taxed at source, and the double taxation treaty between the two countries is designed to stop the same gain being taxed twice in full.
The real trade-off is not tax rates so much as documentation and timing. An estate with clean title, verified paperwork and an early start on the legal heir or succession certificate can move through this process in months. One without it, as Singh’s case showed, can take years and may need administrative or political intervention to resolve at all.
What Inherited Property India NRI Families Should Do Next
For anyone who has just inherited property in India, or expects to, the sequence that avoids the worst delays starts before the property itself is touched. Establish which succession law applies and whether a will exists, since that decides which certificates come next. Obtain the death certificate and the legal heir or succession certificate early, because almost every other step depends on them. Check the title deed and encumbrance position before assuming the property can be sold, not after a buyer has already been found.
If UK inheritance tax could now apply under the residence test, that is a conversation for a cross-border adviser today, not at the point of sale. And if the property has sat empty or unmonitored in India, a physical check on who actually occupies it is worth doing before it becomes someone else’s decade-long dispute.
Further reporting on cross-border money and property issues and on the family and heritage side of life between two countries is available separately.
What British Indians inheriting property are asking
Can an NRI sell inherited property in India? Yes. Ownership passes to the legal heirs regardless of where they live, though a UK-based owner will typically need a legal heir or succession certificate, updated property records and a PAN card before a sale can be registered.
Can a UK citizen inherit property in India? Yes. Citizenship is not a bar to inheriting Indian property, whether under a will or through intestate succession law, though foreign nationals face separate restrictions on buying property in India that do not apply to inheriting it.
How can capital gains tax on inherited property be reduced? The base cost is fixed at the original owner’s acquisition price, not the value at inheritance, so gains can run higher than expected. Advisers point to claiming the correct indexation option where it applies, securing a lower-deduction certificate before a sale, and claiming foreign tax credit relief in the UK for Indian tax already paid, though the precise mechanics depend on individual circumstances.
Can inherited property be willed on again in India? Yes. Once title has formally passed to an heir, that heir can dispose of the property by their own will in turn, subject to the same religion-based succession rules applying to their own estate.
