facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
The U.K.’s FIG Regime Thumbnail

The U.K.’s FIG Regime

Joel Ibbitson DipPFS

In April 2025, the U.K. tax system moved away from domicile and toward residency as the main test for how someone is taxed. This article will focus on one specific part of it: the new Foreign Income and Gains regime (also known as FIG).

Who can use FIG?

FIG isn't reserved for British nationals. It's open to anyone who becomes a U.K. tax resident, regardless of nationality, provided they meet the residence test.

To qualify, you need to have been a non-U.K. resident for the 10 previous tax years immediately before arriving in the U.K.. This trips people up more often than you'd expect. Say someone became a U.K. resident for a single tax year during Covid and then moved abroad again. That one year would break their consecutive non-residence. If they later returned to the U.K., they'd need a fresh 10 years of consecutive non-residence before they could qualify for FIG.

What FIG gets you

If you do qualify, the benefit is straightforward: 100% relief on foreign income and gains for your first four years of U.K. tax residence, even if that money is brought into the U.K.* After those four years, you move onto the normal "arising basis," where worldwide income and gains are taxed as they happen, in the same way as any other U.K. resident.

As you may expect, there is a trade-off. Making a FIG claim means giving up your personal allowance (currently £12,570 of tax-free income at time of writing) and your Capital Gains Tax annual exempt amount (currently £3,000 of tax-free gains at time of writing) for that tax year, both together, as a package. You can't keep either allowance. So, you lose c. £15,570 of tax-free allowances.

Is FIG always the right option?

Not necessarily. Claiming FIG means giving up some valuable allowances for that tax year, so it isn't automatically the right call just because you qualify. Whether it works in your favor depends on a number of things, including how much foreign income and gains you actually have, how they compare to your U.K. earnings, and your marginal tax rate. For some people the relief comfortably outweighs the allowances given up. For others, particularly those with modest foreign income, it can work out worse than simply staying on the arising basis. One benefit is that the FIG regime is flexible and is applied for each tax year, so if one year it makes sense but the next it does not, you are not committed to sticking to the regime for the full four years. 

Planning considerations

If any of the below resonate, it might be worth having a conversation to explore what makes sense for you:

  • You're planning a move to the U.K. and want to confirm whether you meet the 10-year non-residence test before you arrive.
  • You're weighing up whether a FIG claim is worth it, given the allowances you'd be giving up.
  • You've previously claimed the remittance basis and still have offshore income or gains built up from before April 2025.
  • Your circumstances have changed partway through your four-year FIG window, for example a new job, a family move, or a significant offshore gain you weren't expecting. 
  • You hold investments or business interests outside the U.K. and want a plan in place before you become U.K. resident
  • You don’t qualify for FIG and want to understand how to efficiently plan your return to the U.K. 

Final Remarks

There's no single figure that tells you which camp you fall into. It depends on your specific mix of income, gains, and overall tax position each year, so it's worth checking before assuming either way. Please get in touch with one of our wealth advisors if you'd like more information.


Sources:

https://www.gov.uk/government/publications/tax-changes-for-non-uk-domiciled-individuals/reforming-the-taxation-of-non-uk-domiciled-individuals

https://www.gov.uk/hmrc-internal-manuals/residence-and-fig-regime-manual

https://www.saffery.com/insights/articles/non-dom-tax-changes-the-fig-regime-cgt-and-income-tax/ 


This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.