Pre-Immigration Tax Planning Before Becoming a UK Resident

Overview

The period immediately before becoming a UK tax resident is, for many internationally mobile high-net-worth individuals, the most important planning window in their financial lives. Actions taken — or missed — before you cross the threshold of UK residence can determine your tax position for years and potentially decades ahead.

This guide is aimed at individuals who are planning to move to the UK — typically from the UAE, Singapore, Hong Kong, the US, or other low-tax or territorial-tax jurisdictions — and want to understand what they should be doing in the final months and years before their UK arrival.

This guide is for general information only. Tax rules change and individual circumstances vary. Nothing here constitutes personal tax advice. Always consult a qualified specialist tax adviser before making financial decisions.

What Changes When You Become UK Tax Resident

UK tax residence is determined by the Statutory Residence Test (SRT), a detailed set of rules introduced in 2013 that examines the number of days spent in the UK, the nature of your ties to the UK, and whether you have a home available in the UK. Triggering UK residence has several significant consequences:

Income tax: You become liable to UK income tax on UK-source income from the start of residence. If you qualify for the FIG regime (see below), foreign income remains exempt for four years. After FIG, you are taxed on worldwide income as it arises.

Capital gains tax: You become liable to UK CGT on gains from UK assets immediately, and on non-UK assets after the FIG period or if FIG does not apply.

Inheritance tax: UK residence is increasingly relevant to IHT exposure. Under the post-2025 framework, 10 years of UK residence makes you a "long-term resident" subject to IHT on worldwide assets.

Understanding these changes allows you to plan intelligently before they apply.

The Four-Year FIG Regime: The Most Important Change Since 2025

The Foreign Income and Gains regime, introduced from 6 April 2025, is a genuinely valuable concession for new arrivals. Individuals who:

• Become UK tax resident
• Have not been UK tax resident in any of the 10 tax years immediately preceding their first year of UK residence

...may elect for the FIG exemption. For the first four tax years of UK residence, foreign income and gains are not subject to UK tax — regardless of whether they are brought to the UK. There is no monetary cap.

This replaces the old remittance basis for new arrivals. The FIG exemption is more straightforward: no annual charge, no complex remittance tracking, and no restriction on bringing funds to the UK during the FIG period.

Key planning implication: your FIG clock starts running from your first tax year of UK residence. If you can defer your UK arrival by even one tax year, you do not lose a year of FIG — you simply start it later. But if you arrive mid-year in a year where you spend sufficient days to be UK resident for that year, that counts as your first FIG year.

Timing Your Move to Maximise the FIG Window

Arriving in the UK at the most advantageous point in the tax year can maximise the value of the FIG period. If you arrive shortly before the end of a tax year (5 April), year one of FIG may cover only a few weeks — and the four-year clock has started. Arriving in late April (the start of a new tax year) gives you a full year one.

Additionally, if you have significant foreign income or gains that you expect to realise in the near future — a business sale, a property disposal, the crystallisation of share options — timing these realisations to fall within the FIG period rather than after it can produce very significant tax savings.

Cleaning Offshore Accounts Before Arrival

Even though the FIG regime removes the complexity of remittance tracking for new arrivals during the FIG period, the composition of your offshore funds still matters in two contexts:

1. Post-FIG remittances: Foreign income and gains that arise during the FIG period are not taxed in the UK, but they become part of your offshore funds. If those funds are subsequently remitted to the UK after the FIG period has ended, the question of whether they represent exempt FIG-period income, post-FIG income, or original capital matters for tax purposes.

2. Historical pre-arrival funds: Funds accumulated before your UK arrival that represent a mixture of capital, income, and gains from your non-resident years will not be subject to UK tax when brought to the UK, provided they genuinely pre-date your UK residence. Clear documentation of the composition of those accounts before arrival prevents disputes with HMRC.

Practical steps include: segregating your original capital from accumulated income and gains in separate accounts; documenting the source and history of significant funds; and restructuring accounts that have become mixed so their composition is clear.

Structuring Overseas Assets Before the UK Move

The nature and ownership structure of overseas assets should be reviewed before you become UK resident. Key questions:

Should assets be held personally or through a structure? During the FIG period, foreign income and gains are exempt regardless of how assets are held. After FIG, income from a foreign company or trust may still not be taxable in the UK depending on the structure — but anti-avoidance rules (Transfer of Assets Abroad, Controlled Foreign Company rules, offshore fund rules) mean that simply interposing an offshore company or trust after arriving does not shelter income from UK tax. Structures put in place before UK arrival, for non-tax commercial reasons, may receive more favourable treatment.

Offshore trust timing: If you are considering settling assets into a discretionary trust, doing so before becoming UK resident avoids the trust being treated as a UK settlement from the outset. The treatment of offshore trusts under the post-2025 rules is complex and requires specialist advice.

Offshore companies: If you own shares in an offshore company, the company's income is generally not immediately taxable in the UK even after you become UK resident (subject to CFC rules). Dividends, when paid, will be taxable. Planning the timing and structure of distributions matters.

Offshore Bonds: Purchase Before Arrival

An offshore investment bond (a life assurance policy structured as an investment vehicle, typically written by an insurer in Ireland, Luxembourg, or the Isle of Man) is one of the most tax-efficient wrappers for international investors moving to the UK.

The key benefit is this: during the years the bond is held by a non-UK resident, the fund grows entirely free of UK tax. When the bond is eventually cashed in by a UK resident, a relief known as "time apportionment relief" (subject to rules as they stand at the time) may reduce the taxable gain to reflect the proportion of time the bond was held during non-UK residence.

In practical terms, a high-net-worth individual who purchases an offshore bond three years before becoming UK resident and holds it for a further ten years as a UK resident may find that roughly 23% of any gain (three of the thirteen years held) escapes UK tax via the time apportionment relief — in addition to the top-slicing relief available on bonds generally.

For larger sums, the combination of FIG-period accumulation within the bond and time apportionment relief on earlier non-resident years can be powerful. The bond should be purchased and funded before UK arrival; purchasing it after arrival loses the time apportionment benefit.

Pre-Arrival Gifts to Reduce IHT Exposure

Gifts made before becoming UK resident do not start a seven-year PET clock in the same way as gifts made by a UK resident, and pre-arrival assets fall outside the UK IHT net (for the period before you become a long-term resident). Individuals with very large estates who are planning to move to the UK may wish to consider making substantial gifts to family members before arrival — when the assets are still outside the UK IHT net.

Once you become a long-term UK resident (after 10 years of residence), your worldwide estate becomes subject to UK IHT. Gifts made in the 7 years before death are brought back into the estate for IHT purposes. Gifts made before the clock of UK residence started are in a different legal position. Specific advice is essential — this area is technically complex and the rules have been changing.

Deemed Domicile: No Longer the Main Framework

Under the pre-2025 regime, individuals became "deemed domiciled" in the UK for tax purposes after 15 of the preceding 20 years of UK residence, triggering UK IHT on worldwide assets and ending eligibility for the remittance basis. This 15-of-20 rule has been replaced by the new 10-of-20 "long-term resident" test for IHT purposes. The income and gains position is now governed by the FIG regime (for the first 4 years) and the arising basis thereafter.

If you have a previous period of UK residence that counts towards the 10-year threshold, you need to understand where you stand before making a move.

What to Do Before You Move: A Checklist

1. Confirm eligibility for the FIG regime — check your UK residence history for the preceding 10 tax years.
2. Review and clean offshore accounts — separate capital from income and gains; document fund composition.
3. Model the timing of your move relative to the tax year — consider arriving in April rather than March if possible.
4. Consider purchasing an offshore investment bond before arrival.
5. Review the ownership structure of overseas assets — consult on whether any restructuring is warranted before arriving.
6. Consider pre-arrival gifts if IHT planning is a concern.
7. Review pension arrangements — any cross-border pension issues (QROPS, SIPP, overseas pension) should be addressed before arrival.
8. Identify any offshore income or gains you intend to realise in the near future and consider realising them before or during the FIG period.
9. Engage a UK tax adviser before arriving — not after.

How Global Investments Can Help

Global Investments has over 32 years of experience working with internationally mobile high-net-worth individuals, including many who have moved to the UK from low-tax jurisdictions. We understand the urgency and the complexity of pre-arrival planning — and the cost of getting it wrong.

We work alongside specialist UK tax counsel to help clients plan their UK arrival properly: structuring investments to make best use of the FIG regime, advising on offshore bond purchases, modelling the IHT implications of the move, and ensuring that offshore structures are reviewed and appropriate before UK residence begins. As an independent international firm, we are well positioned to coordinate advice across multiple jurisdictions.

Contact us well before your planned arrival date — the earlier we start, the more planning options remain available.