UK Non-Dom Reform and the FIG Regime: 2026 Update

From 6 April 2025, the UK's long-standing non-domicile regime was fundamentally reformed. The concept of domicile — which had shaped UK international tax planning for over a century — was largely removed from the income tax and capital gains tax framework. In its place came a residence-based system. For internationally mobile HNW individuals, understanding the new rules is essential.

This guide provides a structured explanation of what changed, what the Foreign Income and Gains (FIG) regime means in practice, the position for those who were already in the UK under the old regime, and the planning opportunities that remain.

What Was the Old Non-Dom Regime?

For much of the past century, UK-resident individuals who were not UK domiciled (broadly, those who regarded a country other than the UK as their permanent home) could elect to be taxed on the remittance basis. Under the remittance basis:

• UK income and gains were taxed in full;
• Foreign income and gains were only taxed if remitted to the UK — meaning they could be accumulated offshore indefinitely free of UK tax;
• After 7 years of UK residence, an annual Remittance Basis Charge (RBC) was payable (£30,000-£60,000) to access the remittance basis.

The result: wealthy individuals who could demonstrate a non-UK domicile could live in the UK for many years and accumulate substantial foreign wealth with no UK tax. This was particularly advantageous for individuals from jurisdictions with large inherited wealth or business empires outside the UK.

What Changed from 6 April 2025

The non-domicile remittance basis was abolished. Domicile is no longer the relevant test for income tax and CGT purposes. In its place:

The Foreign Income and Gains (FIG) Regime

For individuals arriving in the UK after a period of non-UK residence, the FIG regime provides a time-limited exemption for foreign income and gains:

Eligibility: Any individual who has been non-UK resident for at least 10 consecutive tax years before the tax year in which they commence UK residence.

Duration: The first 4 UK tax years after beginning UK residence.

What the FIG regime exempts:

• All foreign income (including offshore interest, foreign dividends, overseas rental income, foreign employment income for overseas workdays);
• All foreign capital gains;
• Benefits from offshore trusts (in certain circumstances — see our guide to offshore trusts);
• No tax charge, no reporting requirement for FIG income/gains (though self-assessment is still required for UK-source income).

What is NOT exempt under FIG:

• UK-source income and gains — taxed in full from day one;
• Employment income attributable to UK workdays (though Overseas Workday Relief may apply — see separate article);
• Anything that falls outside the "foreign income and gains" definition.

Year 5 and beyond: Once the 4-year FIG window closes, all worldwide income and gains are taxed under standard UK resident rules. There is no remittance basis, no continuation of FIG, and no opt-out. The individual is fully within the UK tax net.

Who Qualifies for FIG?

The 10-year non-residence test is strict. An individual must have been non-UK resident for each of the 10 tax years immediately before the year of UK arrival. Spending even one year as UK resident during those 10 years breaks the qualifying chain.

This means FIG is primarily aimed at genuinely internationally mobile individuals — those who have spent extended periods in non-UK jurisdictions before moving to (or returning to) the UK. It does not help someone who has lived in the UK for most of their life and then spent 2-3 years abroad.

Impact on Existing UK Residents (Former Non-Doms)

Individuals who were already UK resident and using the remittance basis when the reform came into effect on 6 April 2025 faced a range of outcomes depending on their circumstances:

Short-term residents (fewer than 4 years in the UK on 6 April 2025): These individuals can benefit from FIG for the remainder of their 4-year window, subject to meeting the 10-year non-residence condition.

Long-term residents (10+ years UK residence): These individuals do not qualify for FIG. All their foreign income and gains became taxable under standard rules from April 2025. This was a significant change for individuals who had relied on the remittance basis for years.

Transitional rules: Transitional arrangements applied to certain pre-2025 offshore income and gains. Most significantly, the Temporary Repatriation Facility was introduced.

The Temporary Repatriation Facility (TRF)

For individuals who had accumulated foreign income and gains on the remittance basis (and had not remitted them to the UK), the TRF offers a window to bring that money to the UK at preferential tax rates:

Tax Year	TRF Rate
2025/26	12%
2026/27	12%
2027/28	15%

After 5 April 2028, the TRF closes permanently. Unremitted foreign income and gains subject to the remittance basis that have not been brought under the TRF will remain taxable at full rates if ever remitted to the UK.

Who should consider the TRF?

• Former remittance-basis users with significant accumulated foreign income/gains offshore;
• Those who may wish to bring capital to the UK in future (to invest, buy property, etc.);
• Those who want simplicity — the TRF clears the "offshore pool" and restores a clean tax position.

Calculating the TRF charge: The TRF applies to "designated amounts" — specific sums of offshore income or gains that the individual nominates for the TRF treatment. The 12%/15% rate is charged on the full nominated amount. There is no netting of losses.

Offshore trusts and TRF: Certain trust gains pools (accumulated under the s.87 matching rules) can also be brought into the TRF, simplifying the trust's tax position.

Deadline for the TRF is 5 April 2028. With the window now entering its final two years, former non-doms with offshore pools should model the TRF calculation urgently.

Impact on Offshore Trusts

The reform significantly altered the offshore trust landscape:

• Protected trust status (which had shielded certain pre-2017 non-dom trusts from the attribution rules) was abolished from April 2025;
• Non-resident settlors who had protected trusts now face the standard offshore trust rules;
• FIG-eligible beneficiaries can receive distributions without UK tax in years 1-4;
• The IHT reform effective from April 2026 now brings long-term UK residents' excluded property trusts into the IHT charge (see our offshore trusts guide).

IHT: Residence-Based from April 2026

The non-dom reform extended to IHT with effect from April 2026. The key change:

Under the old rules, an individual's liability to IHT on worldwide assets depended on their domicile. Only UK-domiciled individuals (or "deemed domiciled" individuals with 15+ years UK residence) were subject to IHT on worldwide assets.

From 6 April 2026, IHT exposure depends on long-term UK residence — defined as 10 or more years of UK residence in the preceding 20 tax years. Once that threshold is crossed, worldwide assets are subject to IHT.

The IHT tail extends for 10 years after leaving the UK — individuals who have been long-term UK residents and then leave will remain exposed to IHT on worldwide assets for 10 years of non-UK residence. This is a very long shadow.

The April 2026 transition has now taken effect. Individuals who had not yet reached the 10-year Long-Term Resident threshold by 5 April 2026 and departed the UK before that date benefited from the transitional window. For those who are now approaching or have crossed the LTR threshold since April 2026, the new residence-based IHT rules are live and advice should be sought urgently on their current exposure.

Planning Opportunities Under the New Regime

For new UK arrivals (first 4 years):

• Make the most of the FIG window — receive dividends, interest, rental income, and realise capital gains on foreign assets without UK tax;
• Consider timing distributions from offshore trusts within the FIG window;
• Structure employment to maximise Overseas Workday Relief;
• Begin planning for year 5 now — restructure offshore assets before worldwide taxation applies.

For FIG year 4 (final year of exemption):

• Review what realisations can be accelerated into year 4;
• Consider whether offshore assets should be sold, restructured, or transferred before full UK taxation applies;
• Review pension contributions — in year 5, higher UK tax rates may make pension contributions more valuable.

For long-term UK residents (former non-doms beyond the FIG window):

• Consider the TRF while the 12% rate remains available (2026/27 — final year at 12%);
• Review offshore trust structures urgently;
• Model IHT exposure — the transition to the residence-based regime took effect in April 2026; long-term residents should now assess their current IHT exposure on worldwide assets under the new rules.

For non-UK residents considering a return to the UK:

• Realise offshore gains and income before returning — these will be FIG-exempt in the first 4 years, but only if foreign sourced;
• If you have been non-resident for fewer than 10 years, you do not qualify for FIG — the timing of return matters greatly.

Tax rules in this area are complex and recent. Legislative details are still being refined by HMRC guidance. This article reflects the position as of June 2026 and is not a substitute for personalised advice from a qualified UK tax adviser with international expertise.

How Global Investments Can Help

The reform of the UK non-dom regime is the most significant international tax change of the past 30 years. Whether you are a new arrival seeking to maximise the FIG window, a former non-dom grappling with the TRF, or a long-term resident facing the new IHT regime, we can help you navigate the changes. Global Investments works with specialist UK tax advisers and private client lawyers across multiple jurisdictions to develop and implement strategies tailored to your specific situation. Contact us for a confidential review.