UK Foreign Income and Gain (FIG) regime
UK Foreign Income & Gains regime (FIG)
If you've moved to the UK from abroad, or you're a UK national who has spent a long time living overseas and is now coming home, you may have heard that the UK’s old "non-dom" tax rules have been scrapped. From 6 April 2025, they've been replaced with something called the Foreign Income and Gains (FIG) regime.
This new regime could make a real difference to how much UK tax you pay on income and gains you earn outside the UK. Here's what's changed, who it affects, and what you need to know about it.
(This article focuses on income tax and capital gains tax. We've written separately about how the changes affect inheritance tax and trusts.)
How things used to work
Most people who live in the UK pay tax on their worldwide income and gains, wherever in the world that money was earned. This is called the "arising basis."
But there used to be an exception. If you lived in the UK but your permanent home (your "domicile") was legally somewhere else, you could choose the remittance basis instead. Under this system, you paid full UK tax on anything you earned in the UK, but you only paid UK tax on your foreign income and gains if you actually brought that money into the UK, or otherwise benefited from it here.
There were catches, though:
Choosing the remittance basis meant giving up your tax-free personal allowance and your CGT exempt amount for that year.
It was free for your first seven years of UK residence. After that, you had to pay £30,000 a year for the privilege — rising to £60,000 once you'd been here more than 12 years.
Once you'd been UK resident for 15 of the previous 20 years, you became "deemed domiciled". After this, the remittance basis was no longer available to you at all, and you were taxed on your worldwide income and gains like everyone else.
That whole system is now gone for new claims, replaced by the FIG regime.
What is the FIG regime, and does it apply to me?
The FIG regime is aimed at what the rules call "qualifying new residents". Essentially, this is anyone who becomes UK tax resident after having spent at least 10 consecutive tax years living outside the UK.
If that's you: for your first four tax years of UK residence, you can claim not to pay any UK tax at all on your foreign income and gains, no matter whether you bring that money to the UK or leave it abroad. There's no need to keep your money offshore to protect it, which was an awkward requirement of the old remittance basis.
The FIG regime applies whether or not you're UK domiciled. So if you're British, but you've been living and working abroad for more than 10 years and you're now moving home, you can use this regime too, something the old remittance basis never allowed.
If, on 6 April 2025, you'd already been UK resident for less than four years (having had your 10 years abroad before that), you can still claim the relief for whatever's left of your four-year window.
The four years is a hard limit. Once they're up, that's it, you're taxed on your worldwide income and gains from then on, just like any other UK resident. This is a much shorter window than the old rules, which gave people up to 15 years before becoming deemed UK domiciled.
What if I leave the UK partway through my four years?
You don't necessarily lose your remaining entitlement. If you leave the UK temporarily during your four-year window and then come back before the window closes, you can pick up where you left off.
For example: say you become UK resident in 2025/26, then leave the UK and become non-resident in 2026/27, then return and become UK resident again from 2027/28 onwards. You'd still be able to claim FIG relief for 2025/26, 2027/28 and 2028/29, but you won't get a full four years' worth, because that middle year abroad doesn't count, and you can't claim it back later.
How is my UK residence worked out?
Your residence status is determined using the UK's Statutory Residence Test. This is the main test used for general tax residence purposes. A couple of details worth knowing:
If you're UK resident under that test, but you're also treated as resident for tax purposes in another country under a double tax treaty, you're still treated as UK resident for FIG regime purposes. The treaty doesn't let you sidestep this.
If you move to or from the UK partway through a tax year, you may be able to "split" that year into a UK-resident part and a non-resident part. For FIG regime purposes, though, a split year still counts as a full year of UK residence. It therfore eats into your four-year allowance just the same, even though you weren't here all year.
How do I claim the FIG regime?
You claim FIG relief through your self-assessment tax return, for each tax year you want to use it. You need to make the claim by 31 January in the second tax year after the one you're claiming for, so for the 2025–26 tax year, the deadline is 31 January 2028.
A few useful bits of flexibility here:
You can claim relief on your foreign income, your foreign gains, or both. They're treated independently.
You can even pick and choose by source. So if claiming relief would cause a problem with how a particular income source or gain is taxed in another country, you can simply leave that one out of your claim and still claim on everything else.
One thing to be clear on: claiming the FIG regime doesn't get you out of reporting. You'll need to work out and disclose the value of the foreign income and gains you're claiming relief on, within your tax return. In practice, this means that from 6 April 2025, pretty much everyone who's UK resident needs to report their worldwide income and gains on their return — even the bits they're not being taxed on.
What do I give up by claiming the FIG regime?
The FIG regime has a couple of trade-offs to weigh up:
You can't deduct foreign losses. If you make a foreign income loss or a foreign capital loss in a year where you're claiming FIG relief, you can't use that loss to offset other tax. This applies even if your claim only covered one type of relief (say, just foreign gains, or just employment income under Overseas Workday Relief), any foreign losses in that year are still off the table.
You lose your tax-free allowances. If you claim FIG relief in a given year, you lose your income tax personal allowance (£12,570 for 2024–25) and your CGT annual exempt amount (£3,000 for 2024–25) for that year, regardless of what kind of relief you claimed. This is the same trade-off that existed under the old remittance basis, and it means the regime probably isn't worth it if your foreign income and gains are fairly small, you might come out ahead just paying tax normally and keeping your allowances.
How does the FIG regime compare internationally?
One genuinely good feature of the FIG regime: it's free. Unlike the old remittance basis charge, and unlike similar schemes in other countries (Italy's flat-tax regime for new residents, for instance, recently rose to €200,000 a year for new applicants) there's no fee for claiming FIG relief. You either qualify or you don't, and if you do, it costs nothing to use.
The bottom line
If you're moving to the UK after a decade or more abroad, the FIG regime gives you a genuinely useful, cost-free four-year window where your foreign income and gains can stay outside the UK tax net entirely. The trade-off is that the window is shorter than the old rules offered, and you'll give up your personal allowance and CGT exemption in any year you use it.
Getting the timing of your move right, and deciding which years and which income sources to claim relief on, can make a meaningful difference to your tax bill. If you think this might apply to you, it's worth talking it through with us before you make any claims.