New 4-year foreign income and gains (FIG) regime

• w.e.f. 6^th April 2025; Shift from domicile to residence for income tax, capital gains tax and inheritance tax.¹
  
  
• New 4-year FIG regime

In the past non-domiciled individual could pay taxes on FIGs on remittance.

From 6^th April 2025 old rules will be removed and new arrivals will be given 100% relief on FIG in their first four years of tax residence, provided they have not been resident in the past 10 years immediately prior to their arrival. ⁸

This includes UK nationals and UK domiciled individuals who may not have previously had access to, or used, the remittance basis.²⁷

Split year counted as full year of UK residence. ³⁰

If an individual is still within their first four years of UK tax residence under the SRT on 6 April 2025, they can access the 4-year FIG regime until they have exceeded the four-year period. ³¹

If an individual leaves the UK temporarily during the four-year period, they can claim the 4-year FIG regime for any of the qualifying tax years remaining on their return to the UK. ³²

• Former Remittance basis (RB) users
  
  Who are not eligible for new regime will pay taxes on arising basis like any other taxpayer. They will continue to pay tax on pre-6th April 2025 FIGs. ⁹
  
  Remittance basis users who leave the UK and return after a period of ten tax years can only claim the 4-year FIG regime for any new FIG that arises within their 4-year FIG regime period. They cannot claim for any FIG they remit during the 4-year FIG regime period that relates to a year in which they were taxed on the remittance basis. They may, however, be able to use the TRF if their year of return is during the period the TRF is available. ³³
  
  Mixed funds – it is advisable for former RB users planning on remitting funds to open fresh bank accounts for particular transactions to ensure clarity (source of funds) and unnecessary additional tax (avoid additional funds coming in the tax net).

• Capital Gains Tax
  RB users can re-base their foreign assets to 5^th April 2017.
  
  

• New Temporary Repatriation facility (TRF)

This will allow individuals previously taxed on Remittance basis (RB) to designated pre-6th April 2025 FIG and pay reduce rate of tax for three years. ¹³

Tax Year	Rate
2025-26	12%
2026-27	12%
2027-28	15%

Designation means individuals will have freedom to choose when to remit the funds. This does not need to be in the TRF window and could be in a later year. ¹⁵

Partial designations can be made.¹¹⁸

TRF not available to non-residents, thus taxpayer (TP) has to be tax resident in the tax year in which he wishes to claim TRF. ^{ICAEW Tax track podcast – Goodbye non-doms, hello FIG}

Add TRF charge to funds remitted to pay tax in the UK.

No FTCR against TRF ^RDRM73340.

• Overseas workday relief (OWR)
  
  Removes the need to keep funds outside UK and increase the term from 3 to 4 years.
  
  As in RB Regime, with 4-year FIG regime foreign employment income will not be covered by this regime. TP can claim relief under OWR. ³⁸
  
  Annual limit: lower of 30% of the qualifying employment income or £300,000 per tax year.⁷⁷
  
  OWR relief is given by employer via payroll on an estimated basis, corrected via SA on actual days basis. ^{ICAEW Tax track podcast – Goodbye non-doms, hello FIG}

• Claim

New 4-year regime is not automatic taxpayer (TP) will need to make a claim for it in their tax return within 2 years i.e. for 2025-26 by 31^st Jan 2028. ²⁴

TP will need to quantify the amount of income and gains for which relief is being claimed under the regime. If amounts of FIG are not quantified and included in the return, then individuals will remain chargeable and subject to tax at their usual rates. ²⁵

Individuals will not need to make a claim for every year of the 4-year period. ²⁶

Claim can be either of income or gains or both. OWR claim is separate. ⁴¹

If claim made, no relief for losses – income or capital arising in the year of claim. ⁴²

Claim can be source by source basis.⁴³

TP lose their personal allowance and AEA for CGT.⁴⁴

Source:
1. Reforming_the_taxation_of_non-UK_individuals.pdf all numeric references on this article are paragraphs on this technical note.