From 6 April 2025, the existing remittance basis of taxation was substituted by a four-year exemption for foreign income and gains. A residence inheritance tax regime was also created based on a residence-based system. Here’s a download on how be in the best position for taxation for working or retiring in the UK. Make your investments work for you in this new regime.
This straightforward guide explains the UK’s new FIG regime alongside transitional rules and compares it to the old remittance basis for those who were UK non-domiciled taxpayers using the remittance basis previously.
The Fixed Income and Gains (FIG) system will replace the remittance basis starting from the 2024/25 tax year for new UK residents.
Who is affected by the new expat tax regime
- Those who were early and claimed remittance taxation.
- UK residents who obtain UK tax residence status after having been non-residents constitute the group affected by this rule.
- Especially relevant for former remittance basis users.
What Is the FIG Regime?
Beginning 6 April 2025, the UK will end the remittance basis for new or returning residents and introduce the Fixed Income and Gains (FIG) regime instead.
Key Features of the FIG rergime
- The FIG regime offers UK tax residents access to its benefits during their first four years of UK tax residence provided they were non-residents throughout the prior ten tax years.
- Applies **regardless of domicile** status.
- Only UK income and gains are taxed. The UK exempts foreign income and gains from taxation even when these funds are transferred to the UK.
- No need to segregate income/capital.
- Simple compared to the remittance basis.
Eligibility Conditions for FIG regime:
- You must be **UK resident**.
- Your status required you to maintain non-residence throughout 10 consecutive tax years.
- The FIG regime is available for use during a period of four tax years.
- Formerly domiciled residents born in the UK to a UK domicile of origin are ineligible for this status.
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Transitional Rules – 2024/25 Tax Year
This period marks a bridge year between the termination of the old regime and the commencement of FIG.
2024/25 Key Transitional Reliefs:
- Those who met the necessary qualifications previously can utilise the remittance basis during their last permitted tax year.
- Temporary Repatriation Facility (TRF):
- For 2025/26 and 2026/27 only.
- UK residents can bring foreign income and gains that were not previously taxed into the UK and pay a tax rate of 12%.
- Foreign income and foreign gains from before 6 April 2025 fall under this rule.
- For 2025/26 and 2026/27 only.
- Capital Asset Rebasing:
- Your foreign assets will be adjusted to their 5 April 2019 values if you claimed the remittance basis and became deemed UK domiciled in April 2025.
- Applies to disposals **after 6 April 2025.
Comparison: FIG vs Remittance Basis
The Fixed Income and Gains (FIG) regime starting from the 2025/26 tax year will replace the former Remittance Basis for individuals who return to UK tax residency after a period of non-residence.
| Feature | Remittance Basis (Old) | FIG Regime (New from 2025/26) |
|---|---|---|
| Eligibility | Non-doms; claim annually | Any UK resident after 10 years non-resident |
| Duration | Unlimited (with rising RBC cost) | 4 years only |
| Foreign income/gains | Not taxed unless remitted | Not taxed at all |
| Remittance rule | Complex tracing and record-keeping | No remittance restriction |
| Foreign asset sales | Taxed if proceeds remitted | Exempt while within 4-year window |
| RBC Charge | £30k–£60k per year (after 7 years) | None |
| Admin complexity | High | Low |
| After 4 years | Worldwide taxation applies | Same |
Planning for move from remittance taxation to the new regime
- High-income returners who settle back in the UK stand to gain significantly more through the FIG regime compared to the remittance basis.
- TRF enables UK taxpayers to transfer foreign funds with reduced tax liabilities but requires strategic timing of these transfers.
- International investment portfolios require examination since their gains may be actualized either before or after the regime based on your financial objectives.
- The preparation for UK residency should involve planning around trusts and asset holding structures as well as UK situs planning.