From the 2025–26 tax year, the UK introduces a new relief system for non-domiciled individuals moving to or returning to the UK: the Foreign Income and Gains (FIG) Regime. This regime replaces the existing remittance basis for eligible individuals and provides complete UK tax exemption on qualifying offshore income and gains for up to four tax years. However, there are strict conditions and timeframes attached. This blog breaks down the FIG regime in simple, comprehensive terms.
What is the FIG Regime?
The FIG regime, introduced from 6 April 2025, allows certain new UK residents to claim tax relief on foreign income and gains (FIG) that arise during their first four years of UK residence. The aim is to encourage international talent and investment by offering a temporary tax advantage to those who have lived outside the UK for a significant period.
Key Features:
- From 6 April 2025, all UK residents are generally taxed on their worldwide income and gains. However, qualifying new residents can claim FIG relief for up to four years.
- FIG relief is not available for foreign income or gains arising before 6 April 2025, even if you became UK resident earlier.
Who is a Qualifying New Resident?
To claim under the FIG regime, you must be a “qualifying new resident”. This means
- You are UK resident in the relevant tax year (as determined by the Statutory Residence Test).
- You have not been UK resident for at least 10 consecutive tax years immediately before the tax year of your claim.
- You are not a member of the House of Commons or House of Lords at any time during the tax year.
You can be a qualifying new resident for up to four consecutive tax years—your first year of UK residence, plus the next three years—provided you remain UK resident and meet the criteria each year.
Important: If you return to the UK after a long absence, you may qualify even if you lived in the UK before, as long as your absence lasted at least 10 consecutive tax years
How Does the FIG Regime Work?
- Claim Each Year: You must make a separate claim for each tax year you want relief.
- Four-Year Window: Relief is available for up to four consecutive tax years, starting from your first year as a qualifying new resident.
- No Carry-Forward: If you are not UK resident in one of the four years, you lose the opportunity for relief in that year—it cannot be rolled over.
Example:
Mr. Mark moves to the UK on 6 April 2025 after living abroad for over 10 years. He is a qualifying new resident for 2025–26 and can claim FIG relief for that year and the next three years, as long as he remains UK resident.
Duration of Relief: 4 Years Only?
- The FIG regime relief lasts only four tax years, starting from the first year you become UK resident as a qualifying new resident.
- You do not need to be resident in all four years to claim relief.
Let’s say you become UK resident in 2025–26, your eligible FIG years will be:
- 2025–26
- 2026–27
- 2027–28
- 2028–29
If you leave the UK in 2026–27 and return in 2028–29, you still can claim FIG relief in 2028–29, provided it's within the four-year window. However, you cannot claim relief for 2026–27 if you were non-resident that year.
No FIG Relief Before 2025–26?
Even if you become a qualifying new resident in 2023–24 or 2024–25, you cannot claim FIG relief for those years.
FIG regime only applies from 2025–26 onwards.
Example:
- You become UK resident in 2023–24.
- You're a qualifying new resident for:
- 2023–24
- 2024–25
- 2025–26
- 2026–27
- But FIG relief applies only for 2025–26 and 2026–27.
- Foreign income in 2023–24 and 2024–25 will be taxed under remittance basis rules, if claimed.
What Happens After 4 Years?
- From the fifth tax year, you are taxed on worldwide income and gains, like any other UK resident.
- The FIG regime ends permanently after four tax years.
You cannot pause or extend your FIG window.
Which overseas income and gains will qualify for the FIG Regime?
Qualifying overseas income includes:
- Most types of foreign investment income, e.g. dividend/interest.
- Foreign pension income
- Foreign property income
- Foreign social security benefits
- Profits of a trade carried on wholly outside the UK
- Royalties and other income from intellectual property
- Sale of foreign assets
Frequently Asked Questions
Can I claim relief for income earned before 6 April 2025?
No. Relief is only available for foreign income and gains arising from 2025–26 onwards.
What if I leave the UK during the four-year period?
You can only claim for years in which you are UK resident. If you leave and return within the four years, you can claim for any remaining years where you meet the criteria, but missed years cannot be reclaimed later.
Does the regime apply to everyone?
No. Only those who have not been UK resident for at least 10 consecutive tax years before becoming UK resident again are eligible.
How do I make a claim?
Claims are made through your annual UK Self Assessment tax return for each relevant year.
Need Help Navigating the FIG Regime?
Understanding and applying the FIG regime can be complex, especially if you have multiple sources of foreign income or complicated residence histories. At Debitam, we specialise in supporting new arrivals and returning residents with expert tax advice and tailored solutions. Our team ensures you claim all available reliefs while staying fully compliant with UK tax law.
Contact us today for personalised guidance and a smooth transition to the UK’s new tax rules.
