What is the FIG regime, and why was the remittance basis abolished?
The FIG regime (foreign income and gains) is the UK’s new tax regime, in force since 6 April 2025. It replaced the remittance basis for non-doms and exempts a new resident’s foreign income and gains from UK tax during their first four years of UK tax residence.
For more than two centuries the UK tax system distinguished between domiciled and non-domiciled individuals (non-doms). A resident with non-dom status could elect for the remittance basis: UK tax was paid in full on UK-source income, but foreign income and gains were taxed only when remitted (brought into or enjoyed in the UK). The regime attracted wealth and talent to the UK but was widely criticised as unfair and outdated.
In autumn 2024 the government announced the abolition of the non-dom regime, and from 6 April 2025 domicile ceased to be a relevant factor for income tax, capital gains tax and inheritance tax. The UK moved to a system based on tax residence. To keep the country attractive to internationally mobile individuals and returning Britons, the FIG regime was introduced — a time-limited exemption for those who are only just becoming UK resident.
What exactly changed when FIG replaced the remittance basis?
The headline change: from 6 April 2025 all UK tax residents are, by default, taxed on the arising basis — that is, on their worldwide income and gains as they arise, whether or not the money is brought into the UK. Relief is available only by claiming the FIG regime, and only in the first four years of residence.
The old regime let non-doms use the remittance basis for up to 15 years — until they became deemed domiciled. The new FIG regime is shorter and stricter on duration, but more generous in substance: foreign income and gains for which FIG is claimed are fully exempt and can be brought into the UK freely with no further charge — unlike the remittance basis, where tax arose on remittance.
The key difference at a glance
| Feature | Remittance basis (before 6 April 2025) | FIG regime (from 6 April 2025) |
| Based on | Domicile (non-dom) | Tax residence |
| Duration | Up to 15 years (until deemed domicile) | 4 tax years |
| Foreign income treatment | Taxed when remitted to the UK | Fully exempt where claimed |
| Bringing funds into the UK | Taxable | No tax |
| Who can use it | Non-doms only | Any new resident, including Britons |
Who is a qualifying new resident?
The FIG regime can be claimed by a ‘qualifying new resident’ — someone who becomes UK tax resident (under the statutory residence test) after at least 10 consecutive tax years of non-UK residence. Unlike the old regime, FIG is also available to individuals who are UK-domiciled.
Residence is determined by the statutory residence test (SRT). Years of UK residence before 6 April 2025 are counted for FIG purposes. One important exception: members of the House of Commons and the House of Lords cannot use the regime.
In short, the regime is aimed at people arriving in the UK with a clean slate after a long absence: foreign professionals and investors, as well as Britons returning home after more than a decade abroad.
How does the four-year exemption work?
The exemption applies for up to four consecutive tax years, starting with the year you become UK resident. You must make a separate claim for each year, and you can choose which years and which categories to claim — foreign income and foreign gains can be claimed separately.
For example, you can claim the exemption for year one, skip year two, and claim again for years three and four. Only foreign income and gains arising on or after 6 April 2025 are exempt: FIG does not apply to amounts that arose before that date.
Once the four-year window ends, you pay UK tax on your worldwide income and gains in the normal way. Time spent outside the UK during those four years does not extend the window — it simply uses up part of the relief period.
In practice, this means it is more efficient to plan asset sales, the realisation of gains and large income distributions within the four-year window. Imperial & Legal helps clients map out that timetable so the exemption is used to maximum effect.
What do you give up when you claim FIG?
By claiming the FIG regime you lose your personal allowance (the income tax tax-free amount, GBP 12,570) and your CGT annual exempt amount (the capital gains tax-free amount, GBP 3,000) for that year. Foreign losses arising in that year are also not allowable.
These allowances are lost regardless of whether you claim relief on foreign income only, foreign gains only, or both. So the decision to claim FIG for a given year requires a calculation: if your foreign income is modest, losing the tax-free allowances may outweigh the benefit of the exemption. That is precisely why the regime is structured as an annual choice rather than a permanent status.
Another practical point: from 6 April 2025 all residents must report their worldwide income and gains. The previous easement that allowed small amounts of unremitted foreign income to go unreported no longer applies — errors in reporting can lead to additional tax charges and penalties.
What if I already live in the UK? Transitional rules
If on 6 April 2025 you had been UK resident for fewer than four years (after at least 10 years of non-residence), you can use the FIG regime for the remainder of your four-year window. If your residence began earlier, there may be no window left.
Take an example. Someone who became resident in the 2022/23 tax year after 10+ years abroad is, on 6 April 2025, in their third year of residence. They can therefore claim FIG for only one year — 2025/26. Anyone who became resident in 2021/22 or earlier no longer qualifies for FIG: their four-year window has expired.
For those who fall outside the new regime but previously used the remittance basis, separate transitional measures apply — the Temporary Repatriation Facility and asset rebasing. These are covered below.
What is the Temporary Repatriation Facility (TRF)?
The TRF lets former remittance basis users bring foreign income and gains that arose before 6 April 2025 into the UK at a reduced flat rate: 12% in 2025/26 and 2026/27, and 15% in 2027/28. The window closes on 5 April 2028.
It is, in effect, a temporary amnesty for ‘old’ capital. Without the TRF, bringing such funds into the UK would attract the normal rates — up to 45% on income and up to 24% on gains. The TRF offers a chance to ‘clean up’ wealth accumulated abroad at a reduced rate and then use it freely in the UK.
TRF rates and deadlines
| Tax year | TRF rate | Deadline |
| 2025/26 | 12% | designate on the return; amend until 31 January 2028 |
| 2026/27 | 12% | on the return for the relevant year |
| 2027/28 | 15% | final year; the window closes 5 April 2028 |
How it works and how much you can save
To use the facility, you ‘designate’ an amount of qualifying overseas capital on your self-assessment tax return and pay the TRF charge at the relevant rate. After that, the funds can be brought into the UK at any time — including after the window closes — with no further tax.
Example. GBP 1,000,000 of foreign income remitted in the normal way would be taxed at 45% — a charge of GBP 450,000. Designated under the TRF at 12%, the charge is GBP 120,000. That is a saving of GBP 330,000.
The TRF is also available for certain distributions from offshore trusts that are matched to income and gains arising in the trust before 6 April 2025. One technical point: no foreign tax credit can be set against the TRF charge, so where high foreign tax has already been paid, designating an amount under the TRF is not always optimal. You can only use the facility while UK resident in the year of designation.
What is capital gains rebasing to 5 April 2017?
Former remittance basis users who claimed it from 2017/18 onwards and do not qualify for the four-year FIG regime can rebase the value of their non-UK assets to their market value as at 5 April 2017 on disposal. This reduces the chargeable gain.
In other words, only the gain that has accrued since 5 April 2017 is taxed, rather than the gain over the whole period of ownership. The relief does not apply to those who became UK-domiciled or deemed domiciled before 6 April 2025. Because eligibility depends on your history of claims and your status, it is worth obtaining an individual calculation before selling assets.
How has UK inheritance tax changed?
From 6 April 2025 inheritance tax (IHT) also moved from domicile to a residence basis. A ‘long-term resident’ — someone who has been UK tax resident for 10 of the last 20 years — is within the scope of UK inheritance tax on their worldwide assets.
After leaving the country, an individual remains within the IHT net for a time — a ‘tail’ of between 3 and 10 years, depending on how long they were resident. This is a significant change for anyone who planned to hold foreign assets free of UK inheritance tax, and it often becomes the decisive factor in whether to remain in the UK.
Separately, the ‘protected trust’ regime has been removed for those who do not qualify for the four-year FIG regime: income and gains in such trusts are now taxed on the UK-resident settlor on the arising basis. Trusts set up under the old logic need to be reviewed.
What should I do now? Action plan
The key steps are to establish your status under the new rules, work out whether you fall within the FIG regime or the transitional measures, and make use of the time-limited reliefs in good time (the TRF runs only until 5 April 2028).
- Work out how many years you have been UK tax resident under the statutory residence test, and whether any of your four-year FIG window remains.
- Review your worldwide assets: foreign accounts, investments, shareholdings, property and trusts.
- If you used the remittance basis, assess the benefit of the TRF for ‘old’ capital and do not miss the 12% rate.
- Check whether rebasing to 5 April 2017 applies before you sell any foreign assets.
- Assess your risk of becoming a ‘long-term resident’ for inheritance tax and review your trust structures.
- Plan the realisation of income and gains within the four-year exemption window.
How can Imperial & Legal help with the FIG regime?
The move from the remittance basis to the FIG regime affects income tax, capital gains tax, inheritance tax and trust structures all at once. A mistake on timing or reporting can be costly. Our specialists provide:
- Analysis of your tax residence and eligibility for the FIG regime.
- An assessment of whether the TRF is worthwhile, and handling of the designation process.
- A review of whether rebasing to 5 April 2017 applies to your assets.
- Inheritance tax planning and a review of your trust structures.
- Preparation and filing of your self-assessment tax return, accurately and on time.
- Complete confidentiality and support at every stage.
Need help with the transition to the new regime?
The new rules are complex and the reliefs are time-limited. Imperial & Legal will analyse your situation, identify the optimal strategy and support you at every stage — from calculation to filing your return.
