FIG Regime: A Replacement for Remittance Basis in the UK

The remittance basis is gone. Since 6 April 2025, every UK resident pays tax on the arising basis: your full worldwide income and gains, as they arise. There's a new relief in its place, the Foreign Income and Gains (FIG) regime. It isn't universal, though. Only "qualifying new residents" get it, and only for their first four years back in the UK.

Under the old remittance basis, foreign income and gains could stay outside the UK tax net as long as the money remained offshore. The FIG regime works differently.

Relief is limited to a fixed four-year window, but within that window you can bring the exempt money into the UK without creating an extra UK tax charge. See our FIG regime guide for full eligibility criteria and how to claim.

Unlike the old remittance basis, there is no £30,000 or £60,000 annual charge. However, claiming FIG relief means you lose your personal allowance and CGT annual exempt amount for that year, and foreign losses arising in the year generally cannot be used.

Once the four-year window ends, your worldwide income and gains are generally taxed in the UK as they arise, wherever the money is held.

UK resident individuals who are not domiciled or deemed domiciled in the UK currently have the option to pay  tax on the remittance basis. This means that UK tax is only paid on foreign income and gains to the extent that these are brought to the UK in the tax year. Alternatively, they can opt for the arising basis, where UK tax is payable on worldwide income and gains arising in the tax year.

However, the current mechanism is soon to be abolished from 6 April 2025, and be replaced by the Foreign Income and Gains (FIG) regime. Under this regime, Foreign Income and Gains will be allowed to be treated as outside the scope of the UK taxation for four tax years.

If you don't qualify for the FIG regime, most often because you've already lived in the UK for several years, there was no cushion when 6 April 2025 arrived. The previous government had promised a 50% reduction on your first year's foreign income. It never happened. The government confirmed at Autumn Budget 2024, on 30 October, that the proposal would not go ahead.

There is a useful CGT concession for some former remittance basis users. If you sell a qualifying foreign asset on or after 6 April 2025, you may be able to rebase it to its 5 April 2017 value, meaning any gain built up before that date is ignored.

To qualify, you must meet all of the following: you were not UK domiciled or deemed UK domiciled at any point before the 2025–26 tax year, you claimed the remittance basis for at least one tax year between 2017/18 and 2024/25, you owned the asset on 5 April 2017, and the asset remained outside the UK from 6 March 2024 to 5 April 2025. If any one of these conditions is not met, the normal CGT calculation applies.

The TRF rate is 12% for 2025/26 and 2026/27, rising to 15% for 2027/28. Once a qualifying amount has been designated and the TRF charge paid, it can generally be brought into the UK later without a further Income Tax or Capital Gains Tax charge arising simply because it is remitted.

However, the TRF is subject to detailed eligibility and designation rules. Amounts that are not designated under the TRF generally remain subject to the normal remittance rules and may be taxed at the Income Tax or Capital Gains Tax rates applying when they are eventually brought to the UK.

The final TRF designation year is 2027/28, although the election for that year can normally be made by the relevant Self-Assessment deadline.

Moreover, the changes to Overseas Workdays Relief (OWR) and the transitional rules for individuals not qualifying for the FIG regime add complexity to the tax planning process. Overall, navigating these changes will require careful consideration and proactive tax planning to ensure compliance and maximise tax efficiency.