In brief
- As of 6 April 2025, the UK's non-domicile framework has been abolished and replaced by the Foreign Income and Gains (FIG) Regime, a residence-based system with significant implications for anyone considering a move to the UK.
- Newly arriving individuals who have not been UK resident in any of the preceding 10 tax years may be eligible for up to four years of full relief on foreign income and gains, a potentially compelling window of opportunity for internationally mobile individuals.
- The regime requires active management: relief is not automatic, claims must be made annually via self-assessment, and there are trade-offs to consider including the loss of the income tax personal allowance and the capital gains tax annual exempt amount.
- Former remittance basis users should also be aware of the Temporary Repatriation Facility, which runs until April 2028 and offers a reduced tax rate of 12–15% on historical offshore income and gains brought within its scope.
What is the FIG Regime?
From 6 April 2025, the UK's tax treatment of individuals moving to the UK from overseas fundamentally changed. The non-domicile framework, under which an individual's domicile status determined their exposure to UK tax on foreign income and gains, has now been replaced by the Foreign Income and Gains regime (the FIG Regime), a residence-based model that applies regardless of domicile. For internationally mobile individuals considering UK residence, understanding how this regime works is essential.
Who qualifies for FIG relief?
Eligibility turns primarily on residence history. An individual must not have been UK resident in any of the 10 consecutive tax years before their arrival. If that condition is satisfied and the individual becomes UK resident under the Statutory Residence Test, they may claim relief on all qualifying foreign income and gains arising during their first four tax years of UK residence.
The years are consecutive not cumulative i.e. if an individual makes a claim in year 1, then does not make a claim in year 2, they can make claims in year 3 and year 4 but not in year 5. Once the first four years of residence have elapsed they can no longer make a FIG claim, even if they did not claim in all four years.
After those four years, the FIG Regime falls away. The individual moves onto the arising basis, under which worldwide income and gains are brought within the scope of UK tax at the time they arise, irrespective of whether the funds are ever remitted to the UK.
Making a claim under the FIG Regime
A claim under the FIG Regime does not arise automatically, individuals who wish to benefit must make an election within their self-assessment return for each relevant tax year. There is considerable flexibility in how this works in practice. A claimant is under no obligation to elect in every year of eligibility; elections may be made selectively, year by year. The claim does need not extend to all categories of foreign income and gains and it may be limited to income alone, gains alone, or individual sources. This can be a valuable consideration where claiming relief in the UK might have knock-on consequences for how that income or gain is treated for tax purposes overseas.
Claims must be submitted no later than 31 January falling in the second tax year after the relevant tax year so, for example, a claim relating to 2026/27 must be filed by 31 January 2029.
The trade-off for claiming under the FIG Regime is the loss of the income tax personal allowance (£12,570 for 2026/27) and the capital gains tax annual exempt amount (£3,000 for 2026/27).
The Temporary Repatriation Facility
The Finance Act 2025 also introduced the Temporary Repatriation Facility (TRF), which runs alongside the FIG Regime for three tax years: 2025/26, 2026/27, and 2027/28. It is aimed at former remittance basis users who hold pre-6 April 2025 foreign income or gains offshore and who wish to benefit at a reduced rate of tax. The rates are as follows:
- 12% for 2025/26 and 2026/27; and
- 15% for 2027/28.
An individual may identify the historical foreign income or gains they wish to bring within the TRF, designate those amounts in their self-assessment return, and pay the TRF charge on designation. The designated funds can subsequently be remitted to the UK (including after the end of the TRF period) without any further tax charge.
Thinking of moving to the UK?
Four years of relief on foreign income and gains (and potentially 9 years of generally favourable tax treatment) is an attractive prospect for any internationally mobile individual, but it requires planning from the outset.
How we can help
If you are considering a move to the UK or have recently arrived and want to understand how the FIG Regime applies to your circumstances, please get in contact with our Private Wealth & Tax team who would be pleased to assist.