Pension Planning for Non-UK Domiciled Individuals: 2026 Guide

The UK's treatment of non-domiciled individuals underwent its most significant reform in a generation in April 2025. The remittance basis — which had been available to non-doms for over a century — was abolished and replaced with a new "Foreign Income and Gains" (FIG) regime for new arrivals. The change has significant implications for pension planning, and for the strategies that non-doms have historically used to manage UK pension wealth efficiently.

This guide sets out the position as at June 2026 for non-doms who are UK residents, who are planning to arrive in the UK, or who have already left and may have UK pension entitlements.

The Old System: Remittance Basis and Pensions

Under the previous remittance basis rules, non-doms could elect to be taxed only on foreign income and gains that they "remitted" to the UK — brought into the country. Offshore income and gains left offshore were not taxable in the UK.

This created a complex interaction with pensions. UK pension contributions made during UK employment were straightforward — eligible for UK income tax relief in the normal way. But the question of whether pension contributions from offshore income, or pension transfers moving between jurisdictions, constituted "remittances" was frequently litigated and required specialist advice. The remittance basis charge (£30,000 to £60,000 per year, depending on years of UK residence) also affected the cost-benefit calculation.

The April 2025 Change: The FIG Regime

From 6 April 2025, the remittance basis was abolished. Individuals who arrive in the UK as tax residents for the first time (or who have not been UK resident for the preceding 10 tax years) now benefit from the Foreign Income and Gains (FIG) exemption instead.

Under the FIG regime:

• For the first four tax years of UK residence, foreign income and gains are completely exempt from UK tax, regardless of whether they are remitted to the UK
• There is no annual charge for using the FIG exemption
• UK-sourced income and gains are taxable as normal from day one
• After four years, individuals become fully subject to UK tax on their worldwide income and gains in the normal way

This is more generous than the remittance basis in one important respect: no charge, no complex remittance tracking. But it is time-limited and applies only to new arrivals.

Pension Contributions During FIG Years

A non-dom who is a UK resident under the FIG regime can make full UK pension contributions and claim UK income tax relief on UK earnings in the normal way. The annual allowance (£60,000 in 2026/27, potentially tapered for high earners) governs the maximum.

For a high earner arriving in the UK with significant overseas assets and UK employment income:

• UK employment income can be contributed to a SIPP or workplace pension
• UK income tax relief of 40% or 45% is available at the margin
• The pension grows free of UK income tax and capital gains tax within the wrapper
• The four-year FIG exemption does not affect the pension contribution rules — UK earnings attract UK relief in the normal way

Where the strategy becomes particularly powerful is for individuals who arrive in the UK on high salaries, maximise pension contributions (using carry-forward if possible — though carry-forward requires prior pension membership), and then leave the UK before the FIG exemption expires. The pension pot accumulated during those years can then be transferred to a QROPS in the destination jurisdiction, potentially on very favourable tax terms.

The Clean Capital Concept Post-FIG

Under the old remittance basis, non-doms needed to maintain strict segregation between "clean capital" (pre-arrival or specifically exempt funds) and UK-sourced income, to avoid accidentally "tainting" offshore funds and creating a tax liability on remittance.

The FIG regime is simpler: foreign income and gains during the four FIG years are exempt from UK tax regardless of remittance. There is no longer the same need to track remittances of foreign income earned during FIG years — they can be brought to the UK freely without UK tax consequence.

However, individuals who were previously on the remittance basis and had accumulated offshore "mixed funds" (a mixture of clean capital, taxable income, and gains) will still need to manage those funds carefully under transitional rules. The Temporary Repatriation Facility (TRF), which allows remittance basis users to bring historically untaxed offshore funds to the UK at preferential rates (12% for 2025/26 and 2026/27, rising to 15% for 2027/28), may be relevant for those in this position.

QROPS Strategy for Non-Doms

For non-doms who accumulate UK pension savings and then leave the UK, a QROPS transfer may offer significant advantages. The sequencing of the strategy is critical.

During FIG years in the UK: contribute heavily to a UK SIPP or workplace pension, claiming full UK tax relief. The pension grows tax-free.

On departure from the UK: consider transferring the accumulated SIPP to a QROPS in your new country of residence. The Overseas Transfer Charge (OTC) of 25% does not apply where the QROPS is in the same country in which you are resident. The previous exemption for EEA and Gibraltar schemes was abolished from 30 October 2024 — only the same-country-of-residence exemption now remains. Planning the jurisdiction of the QROPS relative to your country of residence is therefore essential.

Post-departure: income from the QROPS in the destination country is governed by the Double Taxation Agreement (DTA) between the UK and that country, and by local tax rules. Some jurisdictions (Malta, Gibraltar, the Isle of Man) have QROPS structures specifically designed to provide tax-efficient income to internationally mobile retirees.

The interaction of the Overseas Transfer Charge, the exit timing, the choice of QROPS jurisdiction, and the local tax treatment all require careful pre-departure planning. Errors are not easily reversed.

IHT Planning for Non-Doms with UK Pensions

The IHT treatment of non-doms has always been complex, and the pension reform landscape adds another layer.

Currently, pension funds sit outside the taxable estate for IHT purposes. From April 2027, they will be brought in-scope (see our separate guide on pension death benefits). This change applies to UK pension schemes.

For non-doms who are UK residents, a key question is whether transferring to a QROPS before the death — and before April 2027 — can preserve the outside-estate treatment for death benefits. Under current rules, QROPS funds also generally sit outside the estate. Whether the April 2027 change will extend to QROPS funds as well as UK-registered pensions is an area of active uncertainty.

From 6 April 2025 the concept of domicile was removed from the IHT system and replaced by a residence-based test: an individual is a "long-term resident" (and so within IHT on worldwide assets) once they have been UK resident for at least 10 of the previous 20 tax years. Individuals who have not yet become long-term residents may have additional IHT planning strategies available, particularly around excluded property trusts and the structure of their non-UK assets. These strategies do not interact directly with pension planning but are relevant to the holistic estate plan.

Non-Residents with UK Pension Entitlements

Non-doms who have left the UK and have frozen UK pension entitlements face different considerations. Key points:

• A frozen UK SIPP can continue to hold investments and grow without any ongoing UK tax liability in the wrapper
• Withdrawals from the SIPP by a non-resident are subject to the DTA between the UK and the country of residence; many DTAs allow the country of residence to tax pension income exclusively, enabling a non-resident tax (NT) coding to remove the UK withholding
• For non-residents within five years of leaving the UK, the five-year carry-forward rule for pension contributions still applies if they have UK earnings
• If the UK pension is small and the individual is permanently overseas, consolidation into the QROPS before the five-year window expires is worth considering

Compliance Note

This article is for general information only and does not constitute regulated financial advice. The FIG regime, QROPS transfers, and non-dom IHT planning are highly complex areas subject to ongoing legislative change. The April 2025 reforms are still bedding in and professional advice should be sought before acting. Global Investments Limited is authorised and regulated by the Financial Conduct Authority. Non-doms with UK pensions should seek specialist advice from an adviser with both UK and international expertise.

How Global Investments Can Help

Pension planning for non-domiciled individuals requires expertise that spans UK tax law, international pension structures, and estate planning across multiple jurisdictions. Global Investments works with internationally mobile clients and new arrivals to the UK to structure their pension affairs efficiently — whether that involves maximising UK contributions during FIG years, arranging a QROPS transfer on departure, or navigating the IHT implications of the 2027 changes. Contact us to arrange a consultation.