The FIG Regime: UK Tax Rules for New Arrivals After April 2025

From 6 April 2025, the UK's treatment of internationally mobile individuals fundamentally changed. The remittance basis — which allowed non-UK domiciled individuals to defer UK tax on overseas income and gains by keeping them offshore — was abolished. In its place came the Foreign Income and Gains (FIG) regime: a four-year window of full tax relief for genuinely new arrivals, followed by standard worldwide taxation.

For the right people in the right circumstances, the FIG regime is generous. For those who no longer qualify or whose four-year window has expired, the new rules create a materially different — and often more expensive — tax position than under the old remittance basis.

Who Qualifies for the FIG Regime?

The FIG regime is available to individuals who:

1. Are UK resident in the current tax year.
2. Were not UK resident in any of the 10 tax years immediately preceding their first year of UK residence under the new rules.

This is a clean break requirement. If you have lived in the UK before — even briefly — within the past decade, you will not qualify. The FIG regime is designed exclusively for genuinely new arrivals: people arriving from overseas with no recent UK tax history.

There is no domicile test. Unlike the old remittance basis, which required non-UK domicile status, the FIG regime is available to individuals of any domicile, including those who are domiciled in the UK. What matters is the 10-year non-residence prior to arrival.

What the FIG Regime Provides

During the first four tax years of UK residence, FIG regime claimants receive 100% relief on all overseas income and gains. This means:

• Foreign employment income earned outside the UK is not taxed in the UK.
• Overseas investment income (dividends, interest) arising outside the UK is not taxed.
• Capital gains on the disposal of overseas assets are not taxed.
• The income and gains are completely outside the UK tax net — they do not need to be remitted offshore to escape tax. They are simply ignored for UK tax purposes.

This is more straightforward than the old remittance basis: there is no requirement to maintain clean capital accounts, no tracking of what has been "remitted", and no annual Remittance Basis Charge to pay.

UK income and gains remain taxable in the normal way — the relief is specifically for foreign income and gains.

To claim the relief, you elect on your self-assessment return. Claiming the FIG regime means you lose the UK personal allowance for income tax and the CGT annual exempt amount — the same trade-off that existed under the remittance basis. For those with meaningful overseas income, the relief on that income almost always outweighs the loss of these relatively modest allowances.

Year 5 and Beyond: Worldwide Taxation

After the four-year FIG window closes, the individual moves to standard UK taxation on the arising basis: worldwide income and gains become taxable in the UK as they arise, regardless of whether they are brought into the UK.

This is the same position as any other UK resident. There is no gradual transition or partial relief — it is a clean switch at the start of year five.

For individuals with substantial overseas portfolios, investment companies, or business interests, the switch can represent a significant increase in the UK tax burden. Planning the structure of overseas assets before the FIG window closes is therefore important.

The Temporary Repatriation Facility (TRF)

The Temporary Repatriation Facility is a transitional measure for individuals who used the remittance basis before April 2025 and who have unremitted pre-April 2025 foreign income and gains sitting offshore.

Under the old remittance basis rules, overseas income and gains that were never brought into the UK were simply deferred — not forgiven. They remained taxable if ever remitted. For some long-standing non-doms, these unremitted pots could be very large.

The TRF gives a three-year window (2025-26, 2026-27, and 2027-28) to remit these pre-April 2025 foreign income and gains into the UK at a preferential rate:

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

After the TRF window closes, any remaining unremitted pre-April 2025 income and gains would be taxable at standard rates if remitted — which, for a higher or additional rate taxpayer, means 40-45% on income and 24% on gains (higher rates may apply depending on the nature of the gains).

For former non-doms with large offshore pots, the TRF decision is a significant one. Paying 12% now to "clean" offshore funds — making future UK use or remittance entirely tax-free — is a strong incentive. However, the total amount remitted, the nature of the underlying income or gains, and the individual's future plans all need careful analysis. Taking advice before the TRF window closes is essential.

The Long-Term Resident IHT Test

The most significant change for individuals planning long-term UK residency is the new Long-Term Resident (LTR) test for IHT purposes.

Under the rules effective from April 2025, an individual becomes subject to UK IHT on their worldwide estate once they have been UK resident for 10 of the last 20 tax years. The old domicile-based system — where IHT on worldwide assets only applied to UK-domiciled individuals — has been replaced by this residence-based test.

What this means in practice:

A French national who has lived in London for 12 years is an LTR. Their worldwide estate — including their Parisian apartment, their French investment accounts, and their inherited family property — is subject to UK IHT at 40% (above the NRB) on their death, regardless of their domicile status.

Previously, this individual would only have been subject to IHT on their UK-situs assets, provided they maintained non-UK domicile. That protection is gone once the 10-year LTR threshold is crossed.

The 10-year "tail":

The LTR exposure does not end immediately on leaving the UK. There is a "tail" period: an individual who has been an LTR remains subject to UK IHT on their worldwide estate for a period after ceasing UK residence. The length of the tail depends on how long they were UK resident — longer residents face a longer tail, up to 10 years.

Planning implication:

For non-doms who are approaching the 10-year LTR threshold — or who have recently crossed it — the window for excluded property trust planning may already have closed or be about to close. Excluded property trusts settled before the LTR status is established remain outside UK IHT even after the settlor becomes an LTR. Once the 10-year mark is passed, that opportunity is gone.

Summary of Key Thresholds

Year of UK Residence	FIG Regime Applies?	LTR IHT Exposure?
1-4	Yes	No
5-9	No	No
10+	No	Yes

This table is a simplification — the actual LTR test looks at 10 of the last 20 years, not simply consecutive years. Someone who left and returned may reach the threshold at a different point. But for continuous UK residents, the 10-year mark is the critical inflection point.

Planning Considerations for New Arrivals

New arrivals to the UK considering the FIG regime should prioritise:

1. Restructuring overseas assets before the four-year window expires — moving income-generating assets into wrappers (offshore bonds, company structures) that defer the arising of income until a more tax-efficient moment.

2. Excluded property trust planning if overseas wealth is substantial and the 10-year LTR mark is approaching — the trust must be constituted before LTR status is reached.

3. TRF planning if there are pre-April 2025 unremitted foreign income and gains — modelling whether remitting at 12% now is better than the standard rate later.

4. Double tax agreement review — the UK's DTAs interact with the FIG regime in complex ways, particularly where overseas countries impose withholding tax on income that the UK is exempting under the FIG rules.

The FIG regime is a genuine opportunity for new UK arrivals to build a tax-efficient first four years. But it requires planning: the benefits do not flow automatically, and the decisions made during the FIG years — about asset structure, trust planning, and offshore arrangements — have consequences that last decades.

How Global Investments Can Help

The interaction between the FIG regime, the TRF, and the new LTR IHT test is one of the most complex areas in UK international tax planning. Global Investments works with internationally mobile individuals — executives relocating to London, returning British nationals, international entrepreneurs — to structure their affairs correctly from the moment they arrive in the UK. We coordinate with specialist tax counsel to ensure the FIG election is properly made, overseas assets are structured for the long term, and IHT exposure is managed before the 10-year LTR threshold is crossed.