TL;DR
- The FIG regime lets qualifying new UK arrivals pay zero UK tax on foreign income and gains for up to four years4-year window
- You must have been non-UK resident for at least 10 consecutive tax years immediately before becoming UK resident10-year rule
- The Temporary Repatriation Facility lets you bring historic foreign income to the UK at 12% (2025/26 and 2026/27) or 15% (2027/28)12% to 15%
- IHT is now residence-based: worldwide estate is in scope after 10 years of UK residence out of the previous 20IHT overhaul
💡Quick reference summary. Continue reading for comprehensive analysis and context.
From 6 April 2025, the UK's centuries-old non-domicile (non-dom) tax regime was abolished. In its place, the government introduced the Foreign Income and Gains (FIG) regime: a simpler, residence-based system that gives new UK arrivals a four-year window of tax relief on their overseas income and capital gains.
This guide explains the FIG regime as it operates today. If you are a UK expat in the UAE considering a return to the UK, or a long-term overseas resident arriving in the UK for the first time, the FIG regime is the framework that determines how your foreign income will be taxed. We cover eligibility, how to claim, which income qualifies, the Temporary Repatriation Facility for historic wealth, inheritance tax changes, and practical steps for UAE-based expats.
Part of our UAE expat tax series
This article covers the FIG regime for those becoming UK resident. If you are leaving the UK, the key legislation is the Statutory Residence Test. See: SRT Explained: UK Expat Guide and UK Self Assessment for Dubai Expats.
What Is the FIG Regime?
The Foreign Income and Gains regime is the current system for taxing the overseas income and capital gains of individuals who are new to UK tax residence. It replaced the remittance basis of taxation, which had allowed non-domiciled individuals to keep their foreign income and gains outside the scope of UK tax for as long as they maintained non-dom status (subject to annual charges after 7 and 12 years of residence).
Under the FIG regime, the concept of domicile is no longer relevant for income tax and capital gains tax purposes. Instead, eligibility depends on a single, objective test: how long you have been non-UK resident.
If you qualify, you can elect to pay no UK tax on your foreign income and gains for up to four consecutive tax years. During this period, you can bring your foreign income into the UK without triggering a tax charge. This is a significant change from the old remittance basis, under which bringing foreign income to the UK created an immediate tax liability.
Key difference from the old system
Under the remittance basis, foreign income was only tax-free if you kept it offshore. Under the FIG regime, foreign income is genuinely exempt during your four-year window, regardless of whether you bring it to the UK. You can remit funds freely during the FIG period without any tax consequence.
Who Qualifies for the FIG Regime?
The eligibility test is straightforward. You qualify for the FIG regime if:
- You are UK tax resident for the tax year in question (determined by the Statutory Residence Test)
- You were non-UK resident for at least 10 consecutive tax years immediately before the tax year in which you become UK resident
That is the entire qualifying test. There is no nationality requirement, no domicile test, and no minimum income threshold. It applies equally to:
- British citizens who left the UK a decade ago and are now returning
- Foreign nationals who have never lived in the UK before
- Former non-doms who left the UK, spent 10+ years abroad, and are now coming back
Once you qualify, you can elect into the FIG regime for up to four consecutive tax years, starting from the first tax year in which you become UK resident. You do not have to use all four years. You can elect in for year one, opt out for year two, and elect back in for years three and four. However, the four-year clock starts ticking from the year you become resident, regardless of whether you elect in.
FIG Regime Eligibility at a Glance
10 consecutive years of non-UK residence
Immediately before the tax year you become UK resident. No breaks allowed in this 10-year period.
UK tax resident in the claim year
You must be UK resident under the Statutory Residence Test. If you are non-resident, FIG is not relevant.
Four-year maximum window
Starting from your first year of UK residence. You can elect in or out each year, but the window does not extend.
No domicile or nationality requirement
Anyone meeting the residence test qualifies, whether British, European, or any other nationality.
How to Claim the FIG Regime
Claiming the FIG regime is done by making an election on your Self Assessment tax return for the relevant tax year. There is no separate application form and no advance approval process. The key steps are:
- Register for Self Assessment if you are not already registered. You will need a Unique Taxpayer Reference (UTR) from HMRC.
- File your Self Assessment return for the tax year in question. The standard deadline is 31 January following the end of the tax year (for example, 31 January 2027 for the 2025/26 tax year).
- Make the FIG election on the return. You indicate that you wish to be taxed under the FIG regime and declare your foreign income and gains on the relevant supplementary pages.
- Report your UK-source income in the normal way. The FIG regime only exempts foreign income. UK income is taxed as usual.
The election is made per tax year. You must actively elect in for each year you want coverage. If you fail to make the election on a return (or fail to file a return at all), you will be taxed on your worldwide income for that year at normal rates.
Do not miss the filing deadline
If you fail to file your Self Assessment return by the deadline, you cannot make the FIG election for that year. There is no mechanism to claim retrospectively once the filing window has closed. For the 2025/26 tax year, this means filing by 31 January 2027.
What Income and Gains Qualify?
The FIG regime covers foreign income and foreign capital gains. Specifically, the following categories of overseas income are exempt from UK tax during a FIG election year:
| Income Type | Covered by FIG? | Notes |
|---|---|---|
| Foreign dividends | Yes | Dividends from non-UK companies |
| Foreign interest | Yes | Interest from overseas bank accounts and bonds |
| Overseas rental income | Yes | Rental income from property outside the UK |
| Foreign capital gains | Yes | Gains on disposal of non-UK assets |
| Overseas employment income | Yes | Salary from a non-UK employer for duties performed outside the UK |
| Foreign trading profits | Yes | Profits from an overseas trade or business |
| UK dividends | No | Dividends from UK-registered companies are UK-source |
| UK rental income | No | Always taxable regardless of residence or FIG status |
| UK employment income | No | Income from a UK employer or UK duties |
| UK capital gains | No | Gains on disposal of UK assets (including UK property) |
The distinction is simple: if the income or gain arises from a source outside the UK, it qualifies. If it arises from a UK source, it does not. For someone returning from the UAE with offshore investments, an overseas business, or foreign property, the FIG regime can shelter a significant amount of income from UK tax during the four-year window.
Personal allowance under FIG
When you elect into the FIG regime, you lose your personal allowance (£12,570 for 2025/26) and the annual exempt amount for capital gains. This means your UK-source income is taxed from the first pound. For most people with substantial foreign income, the FIG exemption far outweighs the loss of these allowances, but do the sums before electing in.
The Temporary Repatriation Facility (TRF)
The Temporary Repatriation Facility is a transitional measure designed specifically for individuals who had previously claimed the remittance basis under the old non-dom rules. It addresses the question: what happens to historic foreign income and gains that were kept offshore under the old system?
Under the old remittance basis, foreign income was only tax-free for as long as it remained outside the UK. When non-dom status was abolished, there was a risk that individuals with large offshore pools of unremitted income would face full UK tax rates if they brought those funds to the UK. The TRF provides a time-limited opportunity to bring this money to the UK at reduced rates.
TRF rates
| Tax Year | TRF Rate | Deadline |
|---|---|---|
| 2025/26 | 12% | 31 January 2027 |
| 2026/27 | 12% | 31 January 2028 |
| 2027/28 | 15% | 31 January 2029 |
| 2028/29 onwards | Normal rates | TRF window closed |
The TRF applies a flat tax rate to the amount of previously unremitted foreign income and gains that you bring into the UK during the relevant tax year. At 12% for the first two years, this is significantly below the normal rates of income tax (up to 45%) and capital gains tax (up to 24%) that would otherwise apply.
Who should use the TRF?
The TRF is relevant if you:
- Previously claimed the remittance basis as a non-dom
- Have foreign income or gains from tax years before 2025/26 that you kept offshore
- Want to bring those funds to the UK
It is not relevant if you are newly arriving in the UK and claiming the FIG regime for the first time. Under FIG, your foreign income is already exempt, and you can remit it freely. The TRF exists purely to deal with the legacy of the old remittance basis.
The TRF window is closing
The 12% rate is available for 2025/26 and 2026/27 only. After 2027/28 (at 15%), the facility closes entirely. If you have significant unremitted foreign income from pre-April 2025, consider taking advantage of the TRF before rates increase or the window shuts. This is a one-time opportunity.
Inheritance Tax: The Biggest Change
Alongside the income tax changes, the government fundamentally reformed how inheritance tax (IHT) applies to non-UK domiciled individuals. This is, for many people, the most significant aspect of the non-dom abolition.
The old system
Under the old rules, IHT was based on domicile. If you were non-UK domiciled, only your UK assets (primarily UK property) were within the scope of IHT. Your overseas assets were completely outside the charge, no matter how long you had lived in the UK. You only became "deemed domiciled" for IHT purposes after 15 out of 20 years of UK residence.
The new system
From April 2025, IHT is based on residence, not domicile. The new test works as follows:
10 out of 20 years test
If you have been UK resident for at least 10 out of the previous 20 tax years, your worldwide estate is subject to UK IHT. This is a much shorter window than the old 15 out of 20 years deemed domicile rule.
Tail provision after leaving the UK
After you leave the UK, you remain within scope of IHT on your worldwide assets for a period that depends on how long you were UK resident. If you were resident for 10 to 13 years, the tail is 3 years. The tail increases the longer you were resident, up to a maximum of 10 years for those who were resident for 20+ years.
FIG regime does not protect from IHT
Even if you are within your four-year FIG window and paying no income tax on foreign income, the IHT clock is still ticking. Years of UK residence during the FIG period count towards the 10 out of 20 threshold.
IHT tail provision in detail
| Years of UK Residence | Tail Period After Departure |
|---|---|
| 10 to 13 years | 3 years |
| 14 years | 4 years |
| 15 years | 5 years |
| 16 years | 6 years |
| 17 years | 7 years |
| 18 years | 8 years |
| 19 years | 9 years |
| 20+ years | 10 years |
Source: Finance Act 2025, Schedule 2. "Years of UK residence" refers to years out of the previous 20.
The practical implication is significant. If you lived in the UK for 20 years and then moved to Dubai, your worldwide estate (including UAE property, overseas investments, and foreign bank accounts) remains within scope of UK IHT for 10 years after your departure. At a rate of 40% above the nil-rate band (currently £325,000), this is a substantial exposure.
IHT is now harder to escape
Under the old system, a non-dom could live in the UK for 14 years and have their worldwide estate completely outside IHT scope. Under the new rules, just 10 years of residence brings your worldwide estate into scope, and the tail provision means it stays in scope for years after you leave. Estate planning is now essential for any long-term UK resident with overseas assets.
How the FIG Regime Interacts with the Statutory Residence Test
This is an area that causes frequent confusion, so it is worth being precise about the relationship between the FIG regime and the Statutory Residence Test (SRT).
The SRT determines whether you are UK tax resident for a given tax year. The FIG regime determines how your foreign income is taxed if you are UK resident. They are two separate pieces of legislation that operate at different stages:
Step 1: Apply the SRT
Are you UK tax resident this year? If no (you pass the automatic overseas test or the sufficient ties test as non-resident), your worldwide income is generally outside UK scope. You do not need the FIG regime at all.
Step 2: If UK resident, consider FIG
If you are UK resident under the SRT, your worldwide income is normally within scope of UK tax. The FIG regime lets you carve out your foreign income and gains from that charge, provided you meet the 10-year non-residence qualifying test.
The key point for UAE expats: if you are living in the UAE and are non-resident under the SRT, the FIG regime is irrelevant to you. Your worldwide income (including any UK-source income) is already dealt with under the non-resident rules. The FIG regime only becomes relevant if and when you return to the UK and become UK tax resident.
Check your residence status with our free SRT Day Counter
Not sure whether you are UK resident or non-resident? Enter your days and ties to get an instant result. If you are non-resident, the FIG regime does not apply to you.
Try the SRT Day Counter →What This Means for UAE Expats
The FIG regime has specific implications depending on your circumstances as a UAE-based UK expat. Here are the most common scenarios:
Scenario 1: You left the UK before April 2015 and are considering returning
If you left the UK before 6 April 2015, you have been non-UK resident for at least 10 consecutive tax years (2015/16 through 2024/25). This means you qualify for the FIG regime from the first year you return to the UK.
This is the most straightforward case. When you become UK resident again, you can elect into FIG and pay zero UK tax on your foreign income and gains for up to four years. Your UAE investments, overseas property income, foreign dividends, and offshore capital gains are all sheltered.
Scenario 2: You left the UK after April 2015 but before April 2016
If you left during the 2015/16 tax year, you may have been UK resident for part of that year (depending on split year treatment). If you were non-UK resident for the full years 2016/17 through 2025/26, that gives you exactly 10 consecutive non-resident years. You would qualify for FIG from 2026/27 if you return and become UK resident.
The timing is tight. You need to confirm your residence status for each of those 10 years to ensure there was no break in non-residence.
Scenario 3: You left the UK after April 2016
If you left the UK after April 2016, you have not yet completed 10 consecutive years of non-residence. You do not currently qualify for the FIG regime. You would need to remain non-UK resident until the 10-year threshold is met before you could return and claim FIG.
For example, if you left the UK on 1 September 2018 and became non-resident from 2018/19, you would need to remain non-resident through 2027/28 to have 10 consecutive non-resident years. You could then return in 2028/29 and claim FIG.
Scenario 4: You are staying in the UAE permanently
If you have no plans to return to the UK, the FIG regime has limited direct relevance to you. However, the IHT changes are still important. If you were UK resident for 10+ years before moving to the UAE, your worldwide estate remains within scope of UK IHT during the tail period. This affects your estate planning even if you never return.
Transitional provisions for former non-doms
If you were claiming the remittance basis before April 2025 and you are still UK resident, you may be eligible for the FIG regime for a reduced number of years (depending on how many years of UK residence you had when the new rules took effect). The transitional rules aim to ensure that former non-doms who had unused years under the old regime are not disadvantaged. The specifics depend on your individual residence history, so professional advice is essential.
Transitional Provisions and the Move from Remittance Basis
The shift from the remittance basis to the FIG regime was not instant for everyone. Several transitional provisions exist to manage the changeover:
Former remittance basis users who are still UK resident
If you were using the remittance basis before April 2025 and you remain UK resident, you may be eligible for the FIG regime if you have not been UK resident for more than four years since the date you would have first qualified (counting as if the FIG regime had always existed). In practice, this means individuals who arrived in the UK within the four years before April 2025 can still access the FIG regime for their remaining years up to the four-year maximum.
For example, if you became UK resident in April 2023, you would have two years of the four-year FIG window remaining (2025/26 and 2026/27). If you became UK resident in April 2022, you would have one year remaining (2025/26 only).
Capital gains rebasing
For individuals who were claiming the remittance basis before April 2025, there is a rebasing provision for capital gains. Assets held on 5 April 2019 can be rebased to their market value on that date for CGT purposes. This means that only gains accruing after 5 April 2019 are subject to UK CGT when the asset is eventually disposed of. The pre-April 2019 gain is effectively wiped out.
This rebasing is available only to individuals who were within the scope of the remittance basis before the changes. It does not apply to new arrivals claiming FIG for the first time.
Overseas structures
Many former non-doms used offshore trusts and structures to hold their wealth. The new rules include provisions that look through certain offshore structures to tax the underlying income and gains. Trusts settled by individuals who become long-term UK residents are particularly affected. If you have an offshore trust, the interaction between the trust rules and the FIG regime requires specialist advice.
Practical Steps
Whether you are planning a return to the UK or simply need to understand how the new rules affect your position, here are the practical steps to take:
Confirm your residence history
Map out your UK residence status for each of the previous 10 tax years. You need 10 consecutive years of non-UK residence to qualify for FIG. If you are uncertain about any year, a professional SRT analysis can confirm your position.
Assess your income sources
Categorise your income as UK-source or foreign-source. Only foreign income benefits from the FIG regime. If most of your income is UK-sourced (UK rental income, UK employment), the FIG election may not be worth making given you lose your personal allowance.
Review your IHT exposure
Count how many years you were UK resident in the previous 20. If it is 10 or more, your worldwide estate is within scope of IHT. If you have left the UK, check how many years remain in your tail period.
Consider the TRF if applicable
If you previously used the remittance basis and have unremitted foreign income offshore, model the cost of using the Temporary Repatriation Facility at 12% versus waiting (and paying normal rates later or keeping funds offshore permanently).
Register for Self Assessment
If you are becoming UK resident and want to claim FIG, ensure you are registered for Self Assessment with HMRC. You need a UTR to file, and the FIG election is made on the return.
File on time
The FIG election must be made on your Self Assessment return by the filing deadline. For 2025/26, this is 31 January 2027. Missing the deadline means losing the FIG election for that year, with no ability to claim retrospectively.
Plan your four-year window
Consider which years you want to elect into FIG. You do not have to use all four years. If you expect a particularly high year of foreign income or a large foreign capital gain in year three, you might choose to elect in for that year specifically.
Get specialist advice
The interaction between FIG, IHT, the SRT, offshore structures, and double tax treaties is genuinely complex. A specialist who understands both UK tax and your country of residence can identify planning opportunities and avoid costly errors.
FIG Regime vs the Old Non-Dom System: Key Differences
For those familiar with the old rules, the following comparison highlights the most important differences:
| Feature | Remittance Basis (pre-2025) | FIG Regime (post-2025) |
|---|---|---|
| Qualifying test | Non-UK domicile (or deemed domicile after 15/20 years) | 10 consecutive years of non-UK residence |
| Duration | Indefinite (with annual charges from year 7) | Maximum 4 years |
| Remittance of foreign income | Taxed when brought to UK | No tax on remittance during FIG period |
| Annual charge | £30,000 (7+ years) / £60,000 (12+ years) | None |
| Personal allowance | Lost when claiming remittance basis | Lost when electing FIG |
| UK nationals eligible? | Rarely (required non-UK domicile of origin or choice) | Yes, if 10-year non-residence test is met |
| IHT treatment | Domicile-based (overseas assets excluded until deemed dom) | Residence-based (worldwide estate after 10/20 years) |
The new system is simpler and more objective, but it is also more restrictive. The old remittance basis could be used for decades (albeit with increasing annual charges). The FIG regime is limited to four years. After that, you are taxed on your worldwide income and gains in full, just like any other UK resident.
Common Mistakes to Avoid
Assuming FIG applies automatically
The FIG regime requires an active election on your Self Assessment return each year. If you do not file a return or do not make the election, you are taxed on your worldwide income at normal rates.
Confusing FIG with non-resident status
If you are non-UK resident under the SRT, the FIG regime does not apply and you do not need it. FIG is only for UK residents. Non-residents are already outside the scope of UK tax on most foreign income.
Overlooking the personal allowance loss
Electing into FIG means you lose your £12,570 personal allowance and your CGT annual exempt amount. If your foreign income is modest, the cost of losing the personal allowance could exceed the FIG benefit. Run the numbers first.
Ignoring the IHT tail
Even after leaving the UK, your worldwide estate may remain within scope of IHT for up to 10 years. Many expats focus on income tax and forget about IHT entirely. The tail provision is a serious financial risk.
Missing the TRF window
The Temporary Repatriation Facility offers a 12% rate for 2025/26 and 2026/27 only. If you have significant unremitted foreign income from the old remittance basis era, delaying could mean paying 15% or full rates later.
Not planning the four-year window strategically
You can elect in and out of FIG each year. If you know a large foreign capital gain is coming in year three, save your election for that year rather than using it in a year with minimal foreign income.
Frequently Asked Questions
What replaced non-dom status in the UK?
Who qualifies for the FIG regime?
Can I bring money to the UK after non-dom status was abolished?
How does the FIG regime work for expats returning from the UAE?
What happens after the four-year FIG window ends?
Do I lose my personal allowance under FIG?
If I am non-resident under the SRT, do I need the FIG regime?
How do the new IHT rules affect UK expats in the UAE?
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