Remittance Planning for Non-Domiciles: Legacy Rules and the Post-April 2025 FIG Regime

For over a century, the remittance basis was one of the most significant features of the UK tax system for internationally mobile individuals. It allowed UK residents who were not domiciled in the UK to pay UK income tax and capital gains tax only on foreign income and gains that they brought (remitted) to the UK, leaving untaxed any foreign source amounts kept outside the country.

From 6 April 2025, this regime was abolished and replaced with the Foreign Income and Gains (FIG) regime — a time-limited exemption available to new UK residents for their first four tax years. The change affects planning for current and prospective UK residents, and the transitional provisions that bridge the old and new rules have significant practical importance.

This guide explains the historical remittance basis, the new FIG regime, the transitional measures, and the ongoing relevance of legacy planning concepts such as mixed funds and offshore protected settlements.

The Historical Remittance Basis

Under the remittance basis (in force until 5 April 2025), a UK resident individual who was non-UK domiciled could elect to pay UK tax only on:

• UK-source income and gains (taxable regardless of election)
• Foreign income and gains that were remitted to the UK

Foreign income and gains kept outside the UK — in overseas bank accounts, offshore portfolios, foreign property — were not immediately subject to UK tax. They could be accumulated overseas indefinitely, with the UK tax liability arising only if and when they were brought to (or used in) the UK.

The cost of claiming the remittance basis was:

• Loss of the UK personal allowance for income tax (£12,570 for 2024/25) and the annual CGT exempt amount
• Payment of the Remittance Basis Charge (RBC) for long-term UK residents: £30,000 per year for individuals resident in the UK for 7 of the preceding 9 tax years; £60,000 for those resident for 12 of the preceding 14 years. From 2017, individuals resident for 15 of the preceding 20 years were deemed UK-domiciled ("deemed domicile") and could no longer claim the remittance basis at all.

The remittance basis was particularly valuable for HNW individuals with large offshore portfolios, overseas business income, or pre-UK arrival gains that they wanted to retain offshore without triggering UK tax.

What Constitutes a Remittance?

Under the old rules, a remittance was broadly any bringing of foreign income or gains to the UK — in cash, assets, or by using offshore funds to benefit the individual in the UK. The rules were deliberately broad to prevent indirect access to offshore income.

Key concepts included:

• Direct remittance: cash transferred from an overseas account to a UK bank account
• Indirect remittance: paying UK bills using offshore debit cards; using offshore income as security for a UK loan
• Deemed remittance: certain arrangements where offshore income was used to fund UK investments

The mixed fund rules (see below) determined the order in which different categories of funds were treated as remitted when an account contained both clean capital and unremitted income and gains.

The Mixed Fund Problem

Mixed funds are perhaps the most persistent legacy complication from the remittance basis era.

A mixed fund is an account (or other asset) that contains more than one category of funds — for example:

• Clean capital (assets owned before becoming UK resident, or income taxed in the UK)
• Foreign income (untaxed offshore income arising after becoming UK resident)
• Foreign chargeable gains (untaxed offshore gains arising after becoming UK resident)
• Income taxed in the UK on the arising basis (e.g. income from a UK employment)
• Capital gains taxed in the UK

Under the remittance basis rules (and continuing into the post-April 2025 period for unremitted pre-2025 amounts), remittances from a mixed fund were deemed to consist of specific categories in a fixed statutory order, with the most highly taxed categories remitted first. This ordering frequently resulted in unintentional remittances of untaxed income or gains even when the individual intended to remit only clean capital.

The practical consequence: anyone who held a mixed offshore account during the remittance basis era, and who remits funds to the UK after April 2025, may still be triggering remittances of pre-2025 untaxed foreign income and gains. These remain taxable under the legacy remittance rules for amounts that arose before April 2025. The new FIG regime does not exempt pre-April 2025 unremitted income and gains from UK tax when they are eventually remitted.

Individuals in this position should consider account segregation and a careful mapping of mixed fund compositions before making any transfers.

The Section 809ZA Protected Settlements

Offshore trusts established while the settlor was non-UK domiciled benefit from special protections under section 809ZA of the Income Tax Act 2007. Income and gains within a "protected foreign source income" trust are not taxable on the settlor unless distributions are made to them or their close family in the UK.

Following the abolition of the remittance basis, the interaction of old offshore trust protections with the new FIG regime requires careful professional analysis. The trust protections that applied under the remittance basis era do not automatically translate into new protections under the FIG regime, and HMRC's guidance on the transitional position is technical.

Settlors of existing offshore trusts who were remittance basis users should seek specialist advice on the current tax position of their trust.

The Foreign Income and Gains (FIG) Regime: From April 2025

The FIG regime replaces the remittance basis for new UK arrivals. Its key features:

Scope: available to individuals who become UK resident on or after 6 April 2025, provided they were not UK resident in any of the 10 immediately preceding tax years.

Duration: the FIG exemption applies for the first four tax years of UK residence.

What is exempted: foreign income and foreign chargeable gains arising in those four tax years are completely exempt from UK income tax and CGT, regardless of whether they are remitted to the UK. There is no RBC to pay. Unlike the old remittance basis, there is no restriction on bringing foreign income and gains to the UK during the FIG period — they can be freely remitted without UK tax.

After four years: from the fifth year of UK residence, the individual is taxable on worldwide income and gains in the normal way (the arising basis). The FIG exemption is entirely time-limited.

No personal allowance restriction: unlike the remittance basis, the FIG regime does not require the individual to sacrifice the personal allowance or the CGT annual exempt amount.

Overseas workday relief: available in modified form for employees working partly in the UK and partly overseas during the FIG period.

Transitional Measures for Existing Non-Doms

For individuals who were remittance basis users before April 2025, two transitional measures were introduced:

Rebasing: individuals who were non-domiciled and claiming the remittance basis at some point between 6 April 2017 and 5 April 2025 can elect to rebase foreign assets to their 5 April 2017 market value for CGT purposes. This allows historic offshore gains accrued before April 2017 to be washed out when the asset is sold, reducing the CGT charge on post-April 2025 disposals.

Temporary Repatriation Facility (TRF): available for the three tax years 2025/26, 2026/27, and 2027/28. Allows former remittance basis users to remit pre-April 2025 foreign income and gains to the UK at a reduced flat tax rate:

• 12% in 2025/26 and 2026/27
• 15% in 2027/28

This is available regardless of the individual's current domicile status. It represents a significant opportunity for individuals with large stockpiles of unremitted foreign income and gains to regularise their position at a lower tax cost than the normal income tax or CGT rates that would otherwise apply on remittance.

The TRF is particularly valuable for individuals holding large offshore portfolios of accumulated untaxed foreign income and gains who wish to bring funds to the UK for investment or expenditure. The window is limited, and the reduced rates are only available during the specified years.

Gifts to Overseas Charities

Under the old remittance basis, charitable gifts made from foreign income or gains to UK charities were potentially remittances (they used offshore money in a UK context, even indirectly). Gifts to overseas charities were not remittances under the domestic rules (though the Gift Aid regime required a UK charity to receive the donation for UK tax relief purposes).

Timing of charitable gifts for remittance basis users — and the question of whether legacy remittances are relevant for charitably-minded individuals utilising the TRF — is an area where specialist advice is essential.

Nothing in this guide constitutes tax advice. The rules around non-domicile taxation, the FIG regime, and transitional provisions are highly complex and subject to ongoing legislative development. Individual circumstances vary significantly and professional advice is essential.

How Global Investments Can Help

Our advisory team works alongside specialist UK and international tax advisers to help HNW internationally mobile individuals navigate the post-April 2025 tax landscape. Whether you are a new UK arrival wanting to maximise the FIG period, an existing non-dom with unremitted offshore income considering the TRF, or a long-standing UK resident managing the transition from remittance basis to arising basis, we can help you understand the options and work with appropriate advisers to implement an effective strategy.

Contact our team to discuss your tax planning situation.