The Foreign Income and Gains (FIG) Regime: How the New Non-Dom Rules Work Post-2025

April 2025 marked one of the most significant reforms to UK international tax in a generation: the abolition of the remittance basis and its replacement by the Foreign Income and Gains (FIG) regime. For internationally mobile individuals considering a move to the UK, the FIG regime represents a genuinely attractive proposition — a clean, time-limited window of complete UK tax exemption on all non-UK income and gains, with no requirement to keep foreign funds offshore. But the regime has strict conditions, limited duration, and important transitional elements that require careful understanding.

This guide explains what the FIG regime is, who qualifies, what it covers, and what it does not cover, as of 2026.

Background: The End of the Remittance Basis

Prior to April 2025, non-domiciled individuals resident in the UK could elect to pay tax on the "remittance basis" — meaning UK tax was paid only on income and gains brought into (remitted to) the UK. Foreign income and gains left offshore were not subject to UK tax. For those who had been UK-resident for seven or more years, a Remittance Basis Charge of £30,000 (rising to £60,000 after 12 years) applied.

The remittance basis was the cornerstone of the UK's non-domicile regime and made London one of the world's most attractive locations for internationally mobile wealthy individuals. In the 2024 Autumn Budget, the then-Chancellor announced its abolition with effect from 6 April 2025, replaced by the residence-based FIG regime.

What Is the FIG Regime?

The FIG regime provides complete UK tax exemption on non-UK income and gains for eligible individuals during their first four tax years of UK residence, provided they were not UK-resident in any of the ten tax years preceding their arrival.

The key elements are:

Exemption scope: All non-UK source income (foreign employment income, foreign investment income, overseas rental income, overseas pension income, foreign interest and dividends) and all foreign capital gains (gains on non-UK assets) are completely exempt from UK income tax and CGT during the four FIG years. There is no requirement to keep these funds offshore; the individual can remit freely to the UK without triggering any UK tax charge.

No election required (from 2026 onwards): The FIG regime applies automatically for eligible individuals. However, an individual may choose to opt out of FIG for a particular year where doing so is beneficial (for example, to allow foreign losses to be set against other gains — foreign losses cannot be used against UK gains where FIG applies).

UK income and gains remain taxable: The FIG exemption applies only to non-UK source income and gains. UK source income — UK employment income for UK duties, UK rental income, UK dividends and interest — remains fully subject to UK income tax. UK CGT applies to gains on UK-situs assets in the normal way.

Who Qualifies for FIG?

The qualifying conditions are:

1. UK residence: The individual must be UK-resident for the relevant tax year under the Statutory Residence Test (SRT).
2. Prior non-residence: The individual must not have been UK-resident in any of the ten tax years immediately preceding the year in which FIG is claimed. This is a strict condition — even a single year of UK residence in the preceding ten years disqualifies the individual from FIG entirely.
3. Four-year limit: FIG applies only for the first four tax years of UK residence. From the fifth year onwards, the individual is subject to UK tax on their worldwide income and gains in full.

The ten-year lookback is calculated by reference to the SRT. Individuals who had split years of UK residence in the preceding decade need to assess carefully whether any of those years count as years of UK residence.

Practical Benefits of FIG

For qualifying individuals, the FIG regime is materially more attractive than the old remittance basis in several important ways:

No remittance basis charge: Under the old system, long-term residents paid up to £60,000 per year simply to access the remittance basis. The FIG regime has no equivalent charge.

Free remittance: Foreign income and gains can be brought into the UK freely without triggering any UK tax. Under the remittance basis, bringing offshore funds into the UK was a taxable event — and the rules defining what constituted a "remittance" were extraordinarily complex. The FIG regime eliminates this entirely.

Simplicity: The FIG regime does not require tracking the composition of offshore funds (interest vs capital vs income vs gains) to calculate the tax cost of remittance. Foreign funds can be freely mixed and transferred.

Investment flexibility: FIG-eligible individuals can invest through UK platforms and structures without restriction, holding UK and non-UK assets as they choose. Only gains on UK-situs assets create UK CGT exposure.

What Is Not Covered by FIG?

There are important limitations:

UK source income: Employment income for UK duties, UK investment income, and UK rental income are taxable in full from year one.

IHT: The FIG regime provides no relief from UK inheritance tax. IHT liability is determined by domicile rules (and from 2025, by the new long-term UK residence test for IHT). Individuals in their FIG years may still have UK IHT exposure on UK-situs assets and, if they have become long-term residents, on worldwide assets.

Offshore trusts: Income and gains within offshore trusts settled by FIG individuals are not automatically within the FIG exemption. The trust taxation rules are complex and need separate consideration.

Anti-avoidance: The FIG regime does not override general anti-avoidance provisions. Artificial arrangements to generate foreign income or gains during the FIG years that do not have genuine commercial substance will be challenged.

Transitional Provisions

Individuals who were on the remittance basis before April 2025 and do not qualify for FIG (because they had been UK-resident for more than four years) face a more complex position. The Temporary Repatriation Facility (TRF) — covered in a separate guide — provides a time-limited opportunity for these individuals to bring previously accumulated foreign income and gains into the UK at a preferential tax rate.

For those who have been UK-resident for fewer than four years as of April 2025 and who meet the ten-year lookback condition, FIG applies automatically for the remainder of their four-year qualifying period.

Planning Around the FIG Window

The four-year FIG window is finite and should be used strategically:

Crystallise overseas gains during FIG years: Dispose of non-UK assets standing at significant gains during the four FIG years. Gains are completely exempt; this is significantly more valuable than a low host-country CGT rate.

Rebalance investment portfolios: Restructure portfolios during FIG years to bring them into the most tax-efficient configuration for post-FIG years, when worldwide income and gains will be taxable.

Consider income timing: Where the timing of foreign income receipts is within your control — for example, through the timing of company dividends or trust distributions — accelerate receipts into the FIG years where possible.

Plan the post-FIG position: After four years, you will be subject to full UK taxation on worldwide income and gains. Review whether the UK remains the optimal place of residence, or whether a relocation decision makes sense at the end of the FIG window.

Do not neglect UK-source income planning: FIG provides no relief on UK source income. Minimising UK-source income during FIG years — through investment portfolio structuring and employment arrangement design — reduces the overall UK tax burden even within the protected window.

FIG and the IHT Transition

The 2025 reforms also changed UK IHT for previously non-domiciled individuals. Under the new residence-based IHT test, individuals who have been UK-resident for more than ten of the previous twenty tax years are subject to UK IHT on their worldwide assets. FIG-eligible individuals (fewer than four years of UK residence) are well within the pre-long-term-resident threshold and will not be subject to worldwide IHT. However, UK-situs assets are always within scope of UK IHT, regardless of residence or domicile.

How Global Investments Can Help

Global Investments works with high-net-worth individuals planning or executing a move to the UK, ensuring the FIG window is used to maximum effect. We model the income and gains crystallisation strategy for the four-year period, advise on portfolio restructuring, coordinate the IHT position, and plan the post-FIG transition — including whether to remain UK-resident or relocate again at the end of the FIG period. Tax rules change, and this guide reflects the post-April 2025 position as understood in 2026; professional advice specific to your circumstances is essential. Capital at risk; tax rules may change.