The FIG Regime & New Arrivals to the UK
From 6 April 2025, the UK introduced the Foreign Income and Gains (FIG) regime, replacing the remittance basis entirely. For individuals arriving in the UK who have not been UK tax resident for at least 10 consecutive years, this is a significant opportunity — and one that requires careful planning to use effectively.
What Is the FIG Regime?
Under the FIG regime, qualifying new residents can exempt their foreign income and gains from UK tax for up to four tax years. There is no limit on the amount that can be exempted and no annual levy to pay — a significant improvement on the old remittance basis charge.
Crucially, income and gains sheltered under the FIG regime are permanently exempt from UK tax, even if the funds are later brought to the UK. This is a fundamental difference from the remittance basis, which was a deferral mechanism — the FIG regime gives a clean exemption with no future liability.
After the four-year period expires, the individual becomes fully taxable in the UK on their worldwide income and gains. Planning ahead for that transition is essential.
Who Qualifies?
To qualify, an individual must not have been UK tax resident for any of the 10 tax years preceding their arrival. Domicile is no longer relevant — the test is purely one of residence. This means that British citizens who have been living abroad for 10 years can qualify, as can European and international arrivals.
Both the year of arrival and the year of departure count towards the four-year period — a detail that catches many people out. For example, an individual arriving in the UK in March 2026 has already used year one of their FIG period, leaving only three further years.
Individuals who arrived in the UK after 6 April 2022 may also be able to benefit from their remaining qualifying FIG years, though their position can be more complex as they may have been both remittance basis taxpayers and FIG regime taxpayers.
What Income and Gains Are Covered?
The FIG regime covers most overseas income and gains you would expect — non-UK bank interest, dividends from non-UK companies, overseas rental income, foreign capital gains, and distributions from offshore trusts. However, there are important exclusions and anti-avoidance rules that need to be considered carefully, including for performers and entertainers, and for income arising in certain offshore structures.
It Is Not as Straightforward as It Sounds
Claiming the FIG exemption means losing your personal allowance and CGT annual exemption for that year. For individuals with foreign tax credits, mixed funds, offshore trust interests or complex investment structures, the decision of whether and how to claim in any given year requires careful analysis — it is not always the right answer to claim the exemption automatically.
The reporting requirements are also substantial. Claims must be made on a self-assessment return on a source by source basis, with strict deadlines. Missing a deadline or making an incorrect claim can have consequences that are difficult and costly to unwind.
How Laggan Can Help
We advise individuals considering a move to the UK, those already in their qualifying FIG period, and those approaching the end of it and planning for the transition to worldwide taxation. We also advise on bank account structuring, offshore trust reporting obligations, and cross-border investment planning in the context of the new regime.
If you are planning to come to the UK or have recently arrived, the earlier you take advice the better — the decisions made in year one have consequences that last well beyond the FIG period itself.
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