UK Non-Dom Tax 2026/27: The New Foreign Income and Gains (FIG) Regime Explained

Background: the end of non-dom

For decades, the UK's non-domicile regime allowed individuals who were UK tax-resident but not UK-domiciled to pay tax only on income remitted to (brought into) the UK. Foreign income left offshore was untaxed as long as it was not remitted. Long-term non-doms paid an annual Remittance Basis Charge (RBC) of £30,000 (after 7 years of UK residence) or £60,000 (after 12 years) for the privilege.

The system was regularly criticised as unfair and complex. In the March 2024 Budget, the government announced its abolition. The Finance Act 2025 ended the remittance basis from 6 April 2025.

From that date, all UK tax residents are -- in principle -- subject to UK tax on worldwide income and gains. The Foreign Income and Gains (FIG) regime is the replacement, designed to attract internationally mobile individuals to the UK while removing the indefinite offshore shelter.

The FIG regime -- core structure

Who qualifies?

To be a Qualifying New Resident (QNR) you must:

1. Be UK tax-resident in the tax year for which you are claiming (determined by the Statutory Residence Test); and
2. Have been not UK tax-resident in each of the 10 tax years immediately preceding the first year of your UK residence.

The 10-year lookback is strict. If you were UK-resident for even one year in the previous decade, you cannot be a QNR and cannot access the FIG regime. This is designed to prevent former UK residents from briefly leaving and returning to claim the exemption.

What is exempt?

During the 4-year FIG period, QNRs can elect to exclude from UK taxation:

• Foreign employment income (income for duties performed outside the UK);
• Foreign investment income (overseas interest, dividends, rental income from overseas property);
• Foreign chargeable gains (gains on disposal of overseas assets -- shares, property, other investments held outside the UK);
• Foreign trading income from an overseas trade.

UK-source income and gains are never covered by FIG and remain fully taxable in the normal way.

The 4-year window

The FIG exemption runs for 4 consecutive tax years from the first year of UK residence after the 10-year gap. You cannot skip a year and restart the clock.

After the 4-year period ends, all worldwide income and gains are taxed in full as for any other UK resident.

Claiming FIG

Unlike the old remittance basis, there is no charge for claiming the FIG exemption. However, the claim is not automatic -- you must elect on your Self Assessment return each year you want to use it. If you do not claim, you are taxed on worldwide income and gains in the usual way.

Worked example -- arriving in the UK in 2025/26

Maria, a Swiss national, was last UK-resident in 2010/11. She moves to London on 1 August 2025 (becoming UK tax-resident for 2025/26 under the SRT).

She has:

• Swiss dividend income: £40,000 per year
• A Swiss rental property generating £18,000 per year
• UK employment salary: £90,000

Under FIG (2025/26 to 2028/29):

During the 4-year FIG period, Maria pays UK tax only on her £90,000 UK salary. From 2029/30 onwards, all three income streams are taxable in the UK.

The Temporary Repatriation Facility

The Temporary Repatriation Facility (TRF) is a transitional measure for former non-doms -- those who used the old remittance basis and accumulated offshore income and gains before 6 April 2025.

Under the old system, those funds could only come to the UK at full UK tax rates if remitted. Many long-term non-doms had substantial sums sitting offshore that they were reluctant to bring back.

The TRF offers a reduced rate:

The TRF closes after 2027/28. Funds not repatriated under TRF are not penalised -- they remain offshore -- but future remittances could be taxable under the new regime's mixed-fund rules.

To use the TRF, you must:

1. Nominate the relevant funds on your Self Assessment return.
2. Pay the reduced rate on those funds.
3. Bring the funds to the UK (or make a deemed remittance election).

The TRF applies to income and gains that arose while you were claiming the remittance basis before 6 April 2025.

Overseas Workday Relief

Overseas Workday Relief (OWR) is a separate but related regime. It applies to UK-resident employees who perform some of their work duties outside the UK.

Under the reformed OWR (effective from 6 April 2025), eligible employees can apportion their employment income between UK and overseas duties. The overseas portion is not taxable in the UK, but:

• The relief applies only in the first three years of UK residence (not four, unlike FIG).
• The employee must not have been UK-resident in the three years before the year of arrival (a shorter lookback than FIG's 10-year test).
• The overseas duties must be genuinely performed outside the UK.
• Record-keeping requirements are strict -- travel diaries, overseas work schedules, contracts.

OWR is particularly valuable for banking and finance professionals who work across multiple jurisdictions.

Overseas trusts -- removal of protections

The non-dom regime previously provided significant tax protections for offshore trusts established by non-doms. These "protected settlements" meant that:

• Trust income and gains were not attributed to the UK-resident settlor (under the settlor-interested trust rules) unless distributions were made.
• Beneficiaries could receive distributions without immediate UK income tax if the trust income had not been remitted.

From 6 April 2025, these protections have been removed. The consequence:

• Settlors who are UK-resident and own overseas trusts will have trust income and gains attributed to them under the existing anti-avoidance rules (e.g., TCGA 1992, s.86; ICTA/ITTOIA offshore income gains provisions).
• Beneficiaries who are UK-resident will be charged to income tax on trust benefits received.
• Capital payments from offshore trusts to UK-resident beneficiaries will be subject to CGT.

The removal of trust protections is one of the most significant practical impacts of the reform for ultra-high-net-worth non-dom residents.

Planning implications

Arriving in the UK: If you are considering moving to the UK and have offshore income and gains, the 10-year gap requirement is critical. Confirm your residency history carefully. The FIG years are fixed -- you cannot defer the start.

End of FIG period: Plan in advance for year 5. Restructuring offshore investments takes time. Consider whether it is more efficient to dispose of offshore assets (and pay overseas CGT) before the FIG period ends, or hold them and pay UK CGT.

The TRF window is closing. If you are a former non-dom with pre-2025 offshore funds, the 12% TRF rate in 2026/27 is the last year before the rate rises to 15%. After 2027/28, no reduced-rate option exists.

Seek specialist advice. The FIG rules interact with double tax treaties, trust law, domicile law (domicile remains relevant for IHT) and the SRT in ways that require case-by-case analysis.

Sources

• HMRC: Changes to the taxation of non-UK domiciled individuals
• Finance (No.2) Act 2023; Finance Act 2025
• HMRC: Non-domiciled individuals -- guidance notes
• gov.uk: Tax on foreign income
• HMRC: Temporary Repatriation Facility