The abolition of the "non-dom" rules and remittance basis from April 2025, and introduction of the new four-year FIG Regime has caused a stir in the private wealth world. The Regime offers newcomers complete exemption from UK income tax and capital gains tax (CGT) on their foreign income and gains (FIG), even if those funds are brought to the UK. That sounds attractive, but it only lasts for four years, after which full global taxation applies.
Many have criticised that four years is too short, especially with competitor jurisdictions offering longer, equivalent regimes, and where taxpayers wish to relocate with their family. Fortunately, with good planning the benefits of the FIG Regime could in fact be seen to last nine years.
For most individuals, their true red line is the UK's 40% inheritance tax (IHT) on their global estate, but this does not apply until their tenth year of UK tax residence. In this context, individuals can come to the UK for nine years without worrying about IHT on their non-UK assets: we call this the "Nine-Year Window".
Within this Window, FIG is tax-free in years one to four, and subject to full tax in years five to nine (at up to 45% on income and 24% on gains). However, when averaging those rates across the full Nine-Year Window, it results in surprisingly attractive effective tax rates: 25% on income and 13.3% on gains (assuming stable income/gains).
With some planning, those effective rates could come down even further. For example, if a significant capital gains event (such as a company exit) can be timed so that the gain arises in years one to four, a larger proportion of your gains will have arisen in the "tax-free" portion of the Window. In years five to nine, the focus shifts to mitigating or deferring income (and further gains), using tools such as insurance wrappers, trusts, family investment companies and lifetime gifting, to name a few.
So, before dismissing the FIG Regime, it is worth considering the bigger picture. Nine years is a meaningful stretch—long enough to settle in, see your children through key stages of their education, and make the most of life in the UK. With tax rules always evolving, if you are thinking about a move, now is the time to explore how the Nine-Year Window could work for you.