UK 4-Year FIG Regime Explained — Post-2025 Non-Dom Reform

1. What changed on 6 April 2025

The Finance Act 2025 (giving statutory effect to the Autumn 2024 Budget and the prior spring announcement) carried out the most significant reform of the UK's international personal tax system in a generation. With effect from the start of the 2025/26 tax year:

• The concept of domicile ceased to be relevant for UK income tax and capital gains tax. For IHT, domicile was replaced by a new long-term residence test (see section 7).
• The remittance basis of taxation — the regime under which non-doms could elect to keep foreign income and gains outside UK tax provided the money was not brought to the UK — was closed to all new claims. Pre-2025 unremitted balances retain their identity but can only be released through the transitional reliefs.
• A new 4-year Foreign Income and Gains (FIG) regime was introduced for individuals becoming UK resident after a sufficient period of non-residence. It is purely residence-based.
• The £30,000 / £60,000 remittance basis charges (the annual ticket non-doms previously paid after 7 or 12 years of UK residence) were abolished along with the regime itself.

The political driver was simplicity and perceived fairness — domicile was an antiquated test that turned on a person's father's intentions and was widely seen as gameable. The replacement is, at least conceptually, a clean line: ten years away, four years sheltered, then full arising-basis worldwide taxation forever. Whether it raises or loses revenue is contested; the Office for Budget Responsibility scored the package as a modest net revenue raiser over the scorecard period, but with substantial behavioural uncertainty because high-net-worth non-doms are mobile by definition. Several major jurisdictions — Italy, Portugal, Greece, the UAE and a number of Caribbean centres — actively market alternative resident-investor regimes, and the UK's competitive position for that cohort is now tighter than it has been at any point since the 1990s.

One important point of detail: the abolition is not a hard cliff-edge for everyone. Three distinct populations need to be considered separately — genuine new arrivers (who use the FIG regime), existing non-doms with pre-2025 wealth (who use the TRF and CGT rebasing), and long-resident UK individuals who never claimed remittance basis (who see essentially no change). The remainder of this guide works through each in turn.

2. Eligibility for the FIG regime

FIG is genuinely a new-arrivers' regime. To qualify in a given UK tax year an individual must satisfy three conditions:

• Become UK resident for the tax year in question under the Statutory Residence Test (the test in Schedule 45 Finance Act 2013 is unchanged).
• Have been non-UK resident for the 10 consecutive UK tax years immediately before the year of arrival. A single year of UK residence inside that decade breaks the eligibility.
• Be inside the first 4 UK tax years of the new period of residence. The clock starts in the year you become UK resident and runs whether or not you actually claim FIG each year.

The 10-year prior non-residence test is the gateway. It is also the main loser from the old regime — under the remittance basis non-doms could enjoy the relief for up to 15 of 20 years. Under FIG, four years is the hard ceiling, and there is no extension for any reason.

For people who become resident part way through the 2025/26 tax year having arrived after 6 April 2025, the year of arrival counts as year 1 of the FIG window even where split-year treatment applies. Transitional provisions in Finance Act 2025 also allow someone who became UK resident in 2022/23, 2023/24 or 2024/25 having previously been non-resident for 10 years to claim the balance of the four-year window — so a person resident from 2023/24 counts 2023/24 as year 1 and has 2025/26 and 2026/27 left.

3. What is exempt during the FIG window

When a valid claim is made on the Self Assessment foreign pages for a year inside the window, the following foreign-source items are 100% exempt from UK income tax and CGT:

• Foreign employment income relating to non-UK duties. Work physically performed outside the UK for a non-UK employer — and, with care, the foreign-duties portion of dual contracts — falls inside FIG.
• Foreign investment income. Dividends from non-UK companies, interest from non-UK banks and bonds, foreign rental income (from property situated outside the UK), foreign royalties and most other investment income with a non-UK source.
• Foreign chargeable gains. CGT on disposals of non-UK situs assets — overseas shares, foreign real estate, foreign collectibles — is fully relieved during the window.
• Distributions from non-resident trusts matched to foreign income or gains arising during the FIG window (a narrow but useful concession).

The election is annual and is made on the SA106 foreign pages. Unlike the old remittance basis there is no remittance trap: funds can be brought to the UK freely, and mingling sheltered money with onshore money does not contaminate the relief or trigger a charge. That single feature is the FIG regime's biggest practical improvement over what it replaced.

4. What is NOT exempt

FIG is foreign-source only. Crucially, it does not shelter:

• UK source income. A UK salary, UK rental income, dividends from UK-incorporated companies, interest from UK banks — all are taxed in full at ordinary rates.
• UK chargeable gains. Gains on UK situs assets — UK shares (subject to the statutory situs rules), UK real estate, UK business assets — are fully chargeable.
• Foreign income from UK-controlled sources. A targeted anti-avoidance rule pulls back into UK tax income that is foreign in form but UK-source in substance — for example salary paid by a foreign subsidiary for duties physically performed in the UK, or interest from a foreign company whose income is substantially UK-derived. The rule is designed to prevent FIG being used as a routing wrapper for what is really UK income.
• Personal allowance and CGT annual exempt amount. Both are forfeited for any tax year in which a FIG claim is made — the standard trade-off, mirroring the old remittance basis.

5. The Temporary Repatriation Facility (TRF)

Existing non-doms with stockpiled offshore funds faced a serious problem on 6 April 2025: under the old rules, bringing those funds to the UK at any time in the future would have triggered remittance-basis tax at up to 45% on the income element. The TRF is the legislative answer.

• Window: 6 April 2025 to 5 April 2028. Three UK tax years.
• Scope: pre-6 April 2025 unremitted foreign income and gains, as tracked under the historic remittance basis rules. It does not cover income or gains arising after 6 April 2025.
• Rate: a flat 12% charge if the designation is made in 2025/26 or 2026/27; 15% in 2027/28. The rate is applied to the gross designated amount, not net of any other reliefs.
• Mechanism: the taxpayer makes a designation on the Self Assessment return identifying the offshore funds being brought into scope. Once designated and the tax paid, those funds can be remitted to the UK at any time, in any way, and are treated as clean capital for the future.
• No reliefs:the personal allowance, CGT annual exempt amount, FTCR and the UK's ordinary income tax bands do not apply to the TRF charge.

For most pre-2025 non-doms with meaningful offshore wealth, the TRF is the single most valuable transitional relief: clearing out the historic mixed funds at 12% is dramatically cheaper than the 45% / 24% rates that would otherwise apply on a remittance, and the resulting clean money is then permanently available without further UK tax.

Practical traps to watch. First, the designation must be made against specifically identified pre-6 April 2025 unremitted balances — taxpayers who never kept rigorous source-and-mixing records under the old regime may struggle to evidence what is in scope. Second, the 12% rate in 2025/26 is in many cases tighter than it looks because professional fees and reconstruction costs can be material. Third, designation is a one-way door: once an amount has been brought inside the TRF and the charge paid, it cannot be reversed if subsequent planning shows a better route would have existed. Most advisers recommend completing the diligence and the designation in the first half of the three-year window — 2025/26 or early 2026/27 — to lock in the 12% rate and leave a buffer year before the 15% step-up.

6. The 5 April 2017 CGT rebasing election

A separate transitional measure addresses the capital gains side. Non-doms who claimed the remittance basis in any tax year from 2017/18 to 2024/25 may elect, asset by asset, to rebase foreign personally-held capital assets to their market value at 5 April 2017.

• The election only applies to CGT, not income tax.
• It applies only to personally held foreign assets — not assets held through a non-resident company or trust.
• On a future disposal, only the post-5 April 2017 gain is chargeable.
• The election is irrevocable and is made asset by asset on the SA108 capital gains pages of the return for the year of disposal.

For non-doms who became UK resident in 2017/18 or later (i.e. the year the rebasing date is set to), the relief is substantial — for someone holding, say, Apple shares acquired in 2010, rebasing chops fifteen years of growth out of the chargeable gain.

7. IHT changes — the long-term residence test

Inheritance Tax has its own, parallel reform. Domicile is replaced from 6 April 2025 by a long-term residence concept built on Statutory Residence Test counting.

• Worldwide IHT exposure applies once an individual has been UK resident for at least 10 of the previous 20 tax years. From that point onwards, the individual's worldwide assets (subject to specific reliefs) sit within the UK IHT net.
• 10-year tail on leaving: a person who has accumulated long-term resident status retains a tapered exposure for up to 10 tax years after ceasing to be UK resident, scaling down by full tax years of non-residence.
• New residentshave a clean run-up — broadly, no IHT exposure on non-UK assets until the 10-of-20 threshold is met. UK situs assets are, as always, in the UK IHT net regardless of the owner's status.
• The previous 17-of-20 deemed-domicile rule is gone. The new threshold (10 of 20) catches taxpayers seven years earlier than under the prior regime.

8. Trusts after 2025 — settlor charge mechanism

The IHT shelter previously available through Excluded Property Trusts (EPTs) — non-UK assets settled by a non-dom into an offshore trust were excluded property and outside the UK IHT net indefinitely — has been substantially closed.

• From 6 April 2025, if the settlor is a long-term UK resident, the trust's non-UK assets are pulled into the UK IHT net for the duration of that status. The standard 10-year anniversary and exit charges of the relevant property regime apply.
• Trusts settled while the settlor was a pre-2025 non-dom keep their excluded-property protection only for so long as the settlor is not a long-term resident. Once the settlor crosses the 10-of-20 threshold, IHT exposure switches on for the rest of the period the test is met.
• On the settlor's death, trust assets remain within the UK IHT net if the settlor was long-term resident at death or within the 10-year tail.
• The historic protected settlementrules for income tax and CGT (which prevented anti-avoidance attributions to settlors who were remittance-basis users) are repealed. Settlors of non-resident trusts who are themselves UK resident may now be taxed on the trust's foreign income and gains under standard ToA / s.86 attribution rules, subject to any FIG relief if they personally qualify.

9. Worked examples

10. Practical steps and adviser flags

• Register for Self Assessment within the deadline (5 October following the tax year of arrival). Foreign pages SA106 and residence pages SA109 will normally be needed every year of the FIG window.
• Make the FIG election annually on SA106 — it is not automatic. Track each of the four years carefully; missing a year does not extend the window.
• Keep contemporaneous day-count records for the SRT. The whole regime depends on residence facts; HMRC routinely asks to see day-by-day logs in border cases.
• Segregate offshore funds by source and date — pre-6 April 2025 income, post-6 April 2025 income, capital and clean income — even though FIG itself has no remittance trap, the TRF designation and any future arising-basis taxation depend on identifiable balances.
• Model the TRF designation carefully. The 12% rate window is short; for long-resident non-doms with seven-figure unremitted balances, the saving versus marginal-rate remittance can run into hundreds of thousands of pounds.
• Get adviser sign-off on trust structures. EPTs need to be revisited urgently; many will have lost their headline benefit, and a small minority may benefit from a wind-down rather than continued operation.
• Consider timing of asset disposals. For non-doms eligible to rebase, holding and disposing later (post-2025) at the rebased value is usually cheaper than disposing under the old remittance rules.
• IHT planning is now an earlier conversation. The 10-of-20 long-term resident threshold catches people seven years sooner than the prior deemed-domicile rule. Lifetime gifts, trusts and the seven-year PET clock should be reviewed well before crossing the threshold.