The new Foreign Income and Gains (FIG) regime
The new FIG regime came into effect on 6 April 2025 and is residence based meaning non-domiciled individuals are no longer able to claim the remittance basis of taxation and all UK residents (with a few exceptions) will be subject to tax on worldwide income and capital gains from that date.
Foreign Income and Gains Regime
This new regime is resident based and is only available for those individuals resident in the UK for less than 4 years after a period of 10 years of non-residency.
If you qualify under the FIG regime, individuals will not pay tax on foreign income and gains arising in the first 4 years after becoming UK resident and will be able to bring those funds to the UK without any additional charges. The relief must be claimed on your self assessment return and similarly to the old regime, tax payers electing for the FIG regime will not benefit from the personal allowance or capital gains tax annual exemption.
The FIG regime can only be claimed for the first 4 years, after that period all worldwide income and gains will be subject to taxation – irrespective of whether the funds are remitted to the UK.
The individual’s tax status for the purposes of claiming FIG will be determined using the Statutory Residence Test.
Rebasing for CGT
From 6 April 2025, some individuals who have previously claimed the remittance basis can rebase their foreign capital assets held personally to the market value as at 5 April 2017.
To qualify, the following conditions must be met:
- The individual must not have been UK domiciled nor deemed domiciled at any time prior to 2025/26 tax year.
- The individual must have claimed the remittance basis in any one of the tax years from 2017/18 to 2024/25 inclusive (automatically qualifying does not count).
- The individual must have owned the asset on 5 April 2017 and disposed of it after 6 April 2025.
- The asset must have been located outside the UK throughout the period 6 March 2024 to 5 April 2025 (subject to some exceptions).
Protected trusts and inheritance tax
The protected trust regime will be eliminated from 6 April 2025. Consequently, non-domiciled individuals who hold settlor-interested trusts and do not qualify under the FIG regime will be affected and broadly, these trusts will be taxable on the UK resident settlor as the income arises in the trust.
UK residents that have been resident for over 10 tax years will be subject to IHT on their worldwide estate. These individuals will continue to be subject to UK IHT on their worldwide estate for 10 years after they become a non-UK resident.