Moving to the UK: the four-year FIG regime

For two centuries the UK taxed foreigners through the lens of domicile — an ancestral concept that let some residents shelter foreign income for decades and trapped others in complexity from day one. April 2025 ended all of it. The replacement is simpler, time-limited and, for genuinely new arrivals, more generous in one crucial way: the Foreign Income and Gains (FIG) regime gives qualifying arrivers four tax years in which foreign income and gains are simply outside UK tax — and unlike the old remittance basis, the money can be brought into the UK freely, spent on a house, a school, a life, with no tax consequence.

Who qualifies

One test: you become UK-resident after ten consecutive tax years of non-UK-residence. Domicile is gone; nationality is irrelevant. A German banker arriving for the first time and a British engineer coming home after twelve years in Singapore qualify identically. Someone returning after six years away does not — for them, worldwide UK taxation applies from the start of residence, and the temporary non-residence rules may also drag home gains realised abroad if they left within the last five years.

What the four years cover

• Foreign income: dividends (including from your own company back home), interest, foreign rental income.
• Foreign gains: disposals of non-UK assets — the overseas portfolio, the foreign business, property abroad. (Asset situs has technical edges — crypto especially — worth checking rather than assuming.)
• Foreign employment earnings get a rebuilt Overseas Workday Relief running on the same four-year track: earnings for duties physically performed outside the UK can be relieved, capped annually at the lower of 30% of the employment income or £300,000 — and the money no longer needs to be kept offshore.

Not covered, ever: UK income and UK gains. UK rent, UK dividends, UK property sales and UK salary are taxed normally from day one of residence.

The sharp edges

1. It must be claimed, on a Self Assessment return, year by year, with income and gains elections made separately. No return means no claim means no relief — and "all my income is foreign so I don't need to file" is precisely backwards.
2. Claiming costs the allowances. A claim year forfeits the £12,570 personal allowance and the CGT annual exempt amount. With substantial foreign income the trade is overwhelmingly worth it; with a few hundred pounds of foreign interest, claiming can literally increase your bill. We run the numbers both ways, every year, for every client in the window.
3. Four tax years means tax years, not 48 months. Arrive in late March and your 'first year' is a fortnight long. For anyone with flexibility, landing just after 6 April rather than just before can be worth an entire extra year of relief — one of the few times in tax when a fortnight's delay is worth serious money.
4. Year five is a cliff. Worldwide taxation, no taper. The window is for reorganising: dividends out of the foreign company, gains realised, structures simplified — while it's open. Treating year one as 'plenty of time' is how people arrive at year four with everything still to do.

The other half of the reform: the ten-year IHT tail

The same legislation moved inheritance tax from domicile to residence. Become a long-term resident — ten of the last twenty tax years — and your worldwide estate is in UK IHT scope, and stays in scope for up to ten years after you leave (tapering for shorter stays). Arrivers should note the clock starts quietly ticking toward that status; leavers should know that boarding the plane no longer switches IHT off. Estate planning now starts with counting residence years.

People with old remittance-basis history

Pre-2025 foreign income and gains kept offshore under the old rules didn't become innocent — they remain taxable if remitted. A Temporary Repatriation Facility offered a reduced flat rate to bring such money onshore during a limited window. If you have an old non-dom history and untouched offshore accounts, that history needs specific, dated advice — do not fold it into general FIG assumptions.

The claim decision, as arithmetic

Whether to claim in any given year is a comparison between what the claim shelters and what it costs. Three typical year-one profiles:

Arriver's foreign income that year	Relief if claimed	Cost of claiming (allowance + AEA lost)	Verdict
£800 of foreign interest, UK salary £90k	≈ £360	≈ £5,000 (allowance already tapered — check)	Don't claim
£25,000 of foreign dividends	≈ £8,400	≈ £5,000	Claim — narrowly
£40k dividends + £120k of gains realised	£30,000+	≈ £5,600	Claim, obviously

The lesson in the middle row: modest foreign income makes this a genuine calculation, not a formality — and because the income and gains elections are separate, the answer can be 'claim for gains, skip for income' in the same year. High earners add a twist: the personal allowance is already tapered away above £100,000 of income, which makes claiming dramatically cheaper for exactly the people most likely to benefit. Every January we run the return both ways; it is minutes of work protecting thousands either direction.

Questions we're asked every week

"I'm British — surely this doesn't apply to me?"

If you've been away ten years, it applies to you exactly as it would to any foreigner. Returning Brits are the biggest group of accidental non-claimants, because nobody told them coming home came with a tax holiday.

"Should I sell my foreign investments before or after arriving?"

With FIG available, often it barely matters for UK tax — sales in the window are relieved if claimed. Without FIG (away under ten years), selling before UK residence starts can matter enormously. Which is why the first question is always the ten-year count.

"Does the FIG claim affect my UK mortgage or visa?"

No — it's a tax election, invisible to lenders and the Home Office. What lenders do care about is documented income, which a properly filed return provides.

Arriving, or arrived since April 2025? The £249 arrival review maps your ten-year test, your split year and all four years of the window — credited in full when we do your first return.