From 6 April 2025, a new UK tax regime applies to individuals who become UK tax resident after at least 10 consecutive tax years of non-residence (“qualifying new residents”). For up to four tax years from the point they first become UK resident, they may claim exemption from UK tax on foreign income and gains arising in those years, regardless of whether the funds are brought to the UK. This is known as the Foreign Income and Gains (FIG) regime.
The FIG regime is designed to be simpler than the former remittance basis, as individuals are no longer required to keep foreign income and gains offshore. Individuals who were already UK tax resident for fewer than four tax years on 6 April 2025 (following 10 years of non-residence) may use the regime for the remaining part of their four-year period.
After the four-year period ends, individuals will be taxed in the UK on their worldwide income and gains. This represents a significant change from the previous rules, under which non-UK domiciled individuals could use the remittance basis for up to 15 tax years.
The FIG regime applies equally to UK-domiciled and non-UK-domiciled individuals. As a result, UK-domiciled individuals returning to the UK after at least 10 years abroad may also benefit, despite previously being unable to claim the remittance basis.
The relief is limited to a maximum of four consecutive tax years. If an individual becomes non-resident during this period but later returns to the UK, they may still claim the FIG regime for any remaining eligible years, although the full four years of relief may not be available.
UK tax residence for FIG purposes is determined under the Statutory Residence Test. Individuals who are treated as resident in another country under a double taxation agreement will still be regarded as UK tax resident when assessing eligibility for the FIG regime. Where a tax year is split between UK and non-UK residence, the year will count as a full year of UK residence for FIG purposes, meaning the total period of relief may be less than four full years.
