A new era for new residents: The FIG Regime

From 6 April 2025, the UK’s tax landscape changed significantly for internationally mobile individuals. The old remittance basis, under which non-UK domiciled individuals could shelter foreign income and gains from UK tax by keeping funds offshore, was abolished. In its place, a new residence-based regime has been introduced.
For those who qualify, it offers something genuinely valuable: up to four years of UK residence during which most foreign income and gains are completely free of UK tax, regardless of whether those funds are brought to the UK or kept abroad.

If you have recently arrived in the UK, or are planning to, understanding whether you qualify and ensuring the relief is properly claimed is one of the most important tax steps you can take.

Who qualifies

The foreign income and gains (FIG) regime is available to qualifying new residents. To qualify, you must be UK tax resident in the year of the claim, and you must not have been UK tax resident in any of the ten tax years immediately before your arrival. This applies equally to foreign nationals moving to the UK for the first time and to British nationals returning after a long period overseas. Nationality and domicile are irrelevant and residence history is all that matters. Eligibility is set out in the HMRC Residence and Foreign Income and Gains Manual at RFIG41000.
This could be good news if you became a UK resident in the 2022/23, 2023/24 or 2024/25 tax year and met the ten-year non-residence condition, or if you are arriving now or in the future.
You can access the FIG regime for whatever remains of your four-year window. The clock started when you arrived, not when the new rules came into force.

What the relief means in practice

For each year in which a valid FIG claim is made, most foreign income and gains are entirely exempt from UK tax. This includes overseas investment returns, foreign rental income, dividends from non-UK companies, and foreign capital gains, among others. And crucially, unlike the old remittance basis, which required funds to remain offshore to preserve the tax advantage, under the FIG regime, you are free to bring relieved income and gains into the UK without triggering any further UK tax liability.

To illustrate: consider someone who moves to London in 2025 to take up a senior role, having spent the previous twelve years working in the UAE. Due to their time spent in the UK, they are likely to obtain UK residence that year. This would normally mean that their worldwide income is liable to UK tax. Where they hold a portfolio of overseas investments generating significant annual income, under the FIG regime, provided the claim is made correctly on their Self Assessment return each year, that investment income is fully exempt from UK tax for their first four years of UK residence.
They can transfer funds to a UK bank account, to buy a property, invest locally, or simply to live on, without any UK tax consequences on those amounts. Over four years, for someone with substantial foreign income, the savings can be considerable.

Once the four-year window closes, worldwide income and gains become subject to UK tax in the usual way, making planning during the relief period and ahead of its expiry particularly important.

The annual election and why this cannot be left to chance

The relief is not automatic. For the exemption to apply in any given tax year, a claim must be made on your Self Assessment return for that year. If the claim is not included, the relief is lost.
There is no mechanism to claim retrospectively once the filing deadline has passed. HMRC’s own guidance at RFIG42300 confirms there is no provision within the FIG regime legislation for late claims to be accepted outside the statutory time limit.

There is also a trade-off to consider. In any year in which a FIG claim is made, you lose your entitlement to the UK personal allowance and your Capital Gains Tax annual exempt amount. In some years, when foreign income is relatively modest, it may be more tax-efficient not to claim the allowances and instead retain them. This is not a decision that should be made without carefully reviewing the numbers each year.

How we can help

The FIG regime represents a genuinely significant opportunity for those who qualify, but it requires careful management from the moment you arrive. We work with newly arrived clients to establish whether they qualify, register them for Self Assessment with HMRC, and ensure that the correct claim is made on their return each year. We also help clients plan ahead to the expiry of the four-year window, so that the transition to full worldwide taxation does not come as a surprise.

If you have recently moved to the UK, or are planning to do so, we would be very happy to talk through whether the FIG regime applies to your situation and what it could mean for you.