FIG Regime 101: Guide to UK Foreign Income Relief

If you're planning to move to the UK and have income or investments overseas, there's a new tax regime you need to understand. The Foreign Income and Gains (FIG) Regime came into effect on 6 April 2025, replacing the long-standing non-domicile rules that had been in place for decades.

Whether you're an expat returning home, a digital nomad settling in the UK, or an international professional relocating for work, the FIG regime could offer you significant tax relief on your foreign income during your first years as a UK resident. This guide explains what the regime is, how it works, and whether it might benefit you.

What Is the FIG Regime?

The FIG regime is the UK's new system for taxing foreign income and gains. It replaced the previous "remittance basis" that allowed non-domiciled individuals to pay UK tax only on overseas income they brought into the country.

Under the old rules, if you were classed as non-domiciled, you could keep foreign income and gains offshore indefinitely without paying UK tax on them. This system had been available for up to 15 years, depending on your circumstances.

The FIG regime takes a fundamentally different approach. It offers a four-year exemption period for qualifying new arrivals, during which you can receive 100% relief on your foreign income and gains: regardless of whether you bring that money into the UK.

Note that the non-dom status itself no longer exists for tax purposes. It has been fully replaced by this residence-based system.

Who Qualifies for FIG Relief?

To claim relief under the FIG regime, you must meet the following conditions:

1. You become UK tax resident in the 2025/26 tax year or later
2. You were not UK tax resident in any of the 10 consecutive tax years immediately before the year you claim relief
3. You make a valid claim on your Self Assessment tax return
   ‍

If you meet these requirements, you can claim full relief on foreign income and gains for up to four consecutive tax years from when you first become UK resident.

By way of example, if you became UK resident in the 2025/26 tax year, your four-year window would run through to the end of the 2028/29 tax year.
‍

What Income and Gains Are Covered?

The FIG regime applies to a broad range of overseas income and assets. If you claim relief, the following would be exempt from UK tax:

• Rental income from overseas property
• Dividends and interest from foreign investments and savings
• Capital gains on the disposal of overseas assets
• Employment income generated through workdays exercised overseas

This is a significant benefit if you hold substantial foreign investments or receive income from overseas sources. During your four-year window, none of this income would be subject to UK taxation.

The Key Differences from the Old Remittance Basis

If you're familiar with the previous non-dom rules, understanding the key differences will help you plan effectively. To help you navigate this transition, here are the key differences between the old rules and the new system:
‍

• Duration of relief: While the old remittance basis could last up to 15 years, the FIG regime is strictly capped at 4 years.
• Remittance of funds: Under the old system, bringing money into the UK triggered a tax liability. With the FIG regime, there is no impact on relief when you bring funds into the country.
• Qualifying period: The old rules were based on your domicile status. The new system is simpler: it is based entirely on whether you have been a non-UK resident for the past 10 consecutive years.
• Annual charge: There is no longer an annual charge. Previously, you might have faced a significant fee after 7 years of residency.

The most notable change is the significantly shorter relief period. However, the FIG regime offers one clear advantage: you can bring your foreign income into the UK during the four-year window without triggering any additional tax liability. Under the old system, remitting funds would have created a taxable event.

Important Trade-Offs to Consider

Claiming FIG relief is not always the best option. When you elect into the regime, you forfeit certain UK tax allowances:

• You lose your UK personal allowance (£12,570 for 2025/26)
• You forfeit the capital gains tax annual exemption (£3,000 for 2025/26)
• You cannot use foreign losses to offset UK income or gains in the same tax year

As such, the FIG regime tends to benefit those with substantial foreign income. If your overseas income is relatively modest, the loss of your personal allowance may outweigh the tax relief you would receive.

Consider the following scenarios:
‍

a) High foreign income, low UK income: FIG relief is likely beneficial: you shelter significant foreign earnings while losing a personal allowance you wouldn't fully use anyway.

b) Moderate foreign income, full UK salary: The calculation becomes tighter: you may need professional advice to determine whether claiming relief makes sense.

c) Low foreign income: Claiming relief may actually increase your overall tax burden due to the lost allowances.
‍
‍

What Happens After Four Years?
‍

Once your four-year window closes, the exemption ends completely. From that point forward, your worldwide income and gains become fully taxable in the UK, with no special relief available. To qualify for another four-year exemption in the future, you would need to:

1. Leave the UK and become non-resident
2. Remain non-UK resident for at least 10 consecutive tax years
3. Return to the UK and re-establish tax residence

This is a significant change from the old system, which allowed non-doms to benefit from the remittance basis for much longer periods before becoming deemed domiciled.

The Temporary Repatriation Facility (TRF)

If you previously benefited from the remittance basis and have accumulated unremitted foreign income and gains offshore, there's a transitional measure you should know about.

The Temporary Repatriation Facility allows you to bring historic foreign income into the UK at reduced tax rates:

• 12% for tax years 2025/26 and 2026/27
• 15% for tax year 2027/28

After remitting under the TRF, no further UK tax applies to those funds. This facility is only available for a limited window, so if you have significant offshore funds accumulated under the old rules, prompt planning is essential.

Planning Considerations for New UK Arrivals

If you're moving to the UK and considering whether to claim FIG relief, the following steps will help you prepare:
‍

1. Review your residence history : confirm you meet the 10-year non-residence requirement by examining your travel records and tax filings
2. Quantify your foreign income : list all overseas income sources and estimate annual amounts
3. Model both scenarios : calculate your tax position with and without FIG relief to determine which approach is more favourable
4. Consider timing : if you're close to meeting the 10-year threshold, delaying your arrival by a few months could secure four years of relief
5. Document everything : maintain clear records of your residence status and foreign income to support any claims

For digital nomads considering the UK as a base, the FIG regime offers an attractive proposition. You can establish residence in the UK while sheltering your foreign-source income for up to four years: providing a window to restructure your affairs or build UK-source income before full taxation applies.

How Global Tax Consulting Can Help

Navigating the FIG regime requires careful analysis of your personal circumstances, income sources, and long-term plans. The decision to claim relief: and how to structure your affairs during and after the four-year window: can have significant financial implications.

At Global Tax Consulting, we provide specialist UK expat tax advice tailored to internationally mobile individuals. We can help you:

• Assess your eligibility for FIG relief
• Model the tax impact of claiming versus not claiming
• Structure your arrival timing to maximise benefits
• Plan for the transition when your four-year window ends
• Navigate the TRF if you have historic offshore funds