From the start of the 2025/26 tax year, the longstanding remittance basis regime has been replaced by the new Foreign Income and Gains (FIG) regime. This marks a significant shift in how foreign income and gains are taxed for UK residents, particularly those who are recent arrivals.
Here's what you need to know - especially if you became UK tax resident before 6 April 2025 but may still qualify for some relief.
What is the FIG Regime?
The FIG regime provides tax relief for individuals who become UK tax resident after spending 10 consecutive years as a non-resident.
Under this regime:
- 100% UK tax relief is available on foreign income and gains (FIG) during an individual’s first four tax years of UK residence.
- After this four-year window, individuals are taxed on their worldwide income and gains, regardless of remittance.
Already UK Resident Before 6 April 2025? You May Still Qualify
Even if you arrived in the UK before 6 April 2025, you may still benefit from the FIG regime for any remaining part of your four-year window, provided:
- You became UK tax resident in 2022/23 or later, and
- You had been non-resident for 10 consecutive years prior to your arrival.
In this case, you may be entitled to up to one year of FIG relief (from 6 April 2025 to 5 April 2026), depending on when you arrived. Although the relief can only be claimed from 6 April 2025 onwards, the qualifying conditions are based on your date of arrival.
What About Those Who Claimed the Remittance Basis?
For individuals who previously claimed the remittance basis, transitional provisions apply:
- Foreign income and gains (FIG) that arose before 6 April 2025, and were not taxed due to the remittance basis, will still be taxable upon remittance into the UK.
- The change does not exempt past foreign income or gains from future tax if brought into the UK.
Temporary Repatriation Facility (TRF)
To ease the transition, the government has introduced a Temporary Repatriation Facility (TRF) for individuals previously taxed under the remittance basis. This allows foreign income and gains earned under the old regime to be remitted to the UK at reduced tax rates:
- 12% flat rate for remittances made in 2025/26 or 2026/27.
- 15% flat rate for remittances made in 2027/28.
This is a limited-time opportunity for individuals to bring historical foreign income and gains into the UK at a favourable rate.
Tailored Advice is Key
The introduction of the FIG regime brings new planning opportunities, particularly for recent arrivals and those previously taxed under the remittance basis.
At Arnold Hill, we offer tailored advice to:
- Help you determine your eligibility for FIG relief,
- Assess any remaining relief period you may have,
- Optimise your position under the TRF,
- And develop tax-efficient strategies for your foreign income and gains beyond April 2025.
Get in Touch
Understanding how the new rules apply to your unique situation is essential. Get in touch today to discuss how we can support you with expert, proactive advice under the new FIG regime.
Author, Drupen Patel - Personal Tax Manager
