Foreign Income and Gains (FIG) Regime

In This Article

• What is the FIG regime?
• Who qualifies?
• What income is covered?
• How to claim
• FIG vs the old remittance basis
• What this means for visa holders
• After the 4 years
• Frequently asked questions
• Related terms

What Is the FIG Regime?

The Foreign Income and Gains regime is the UK government's replacement for the non-dom remittance basis, which was abolished in April 2025. Where the old system depended on your domicile — a complex legal concept tied to your permanent home — the FIG regime is based on a simpler question: have you been UK tax resident recently?

If you arrive in the UK and you have not been UK tax resident in any of the 10 previous tax years, you qualify for 4 years of relief on foreign income and gains. This applies regardless of your nationality, domicile, or visa type.

The regime was introduced by the Finance Act 2025 and is administered by HMRC through the Self Assessment system.

Who Qualifies?

To be eligible for the FIG regime you must:

1. Be UK tax resident in the year you want to claim — as determined by the Statutory Residence Test (SRT)
2. Not have been UK tax resident in any of the 10 tax years immediately before the tax year in which you first became UK resident

That second condition is the key one. It does not matter where you were living during those 10 years, only that you were not UK tax resident. HMRC will check this against SRT records and your tax history.

Who this typically includes:

• People moving to the UK for the first time on a Skilled Worker visa or other work visa
• Returning British citizens who have been living and working abroad for over 10 years
• People switching from a Student visa to a work visa, provided they were not UK tax resident during their studies (though most full-time students in the UK will have been resident)

Who this typically excludes:

• Anyone who was UK tax resident within the last 10 years (even for a single year)
• People who have been living in the UK continuously — they are already UK resident

What Income Is Covered?

The FIG regime covers foreign income and gains only. It does not exempt UK-source income.

Covered (foreign):

• Rental income from property abroad
• Dividends from overseas companies
• Interest on foreign bank accounts and savings
• Capital gains on the sale of non-UK assets (shares in foreign companies, overseas property)
• Foreign employment income for duties performed outside the UK
• Overseas pension income

Not covered (always taxable in the UK):

• Your UK salary from a UK employer, paid through PAYE
• UK rental income
• UK bank interest
• Capital gains on UK assets
• Any income arising in the UK

For most sponsored workers whose only income is a UK salary, the FIG regime will not change much on a day-to-day basis. It becomes valuable if you also have overseas investments, property, or other foreign income sources.

How to Claim

FIG relief is not automatic. You must actively claim it each year:

1. Register for Self Assessment with HMRC if you are not already registered
2. File a Self Assessment tax return for the relevant tax year
3. Elect for FIG relief on the return, specifying the foreign income and gains you wish to exclude

There is an important trade-off: if you claim FIG, you lose your income tax personal allowance (currently £12,570) and your capital gains annual exempt amount for that year. This means your UK income is taxed from the first pound.

For someone earning a typical UK salary with modest foreign income, the loss of the personal allowance may outweigh the FIG benefit. For someone with substantial overseas income or investments, FIG is usually well worth it. Run the numbers or get professional tax advice before deciding.

FIG vs the Old Remittance Basis

The biggest practical change: under FIG, you can bring your foreign income to the UK without triggering a tax charge during the 4-year window. Under the old remittance basis, you had to keep the money offshore to retain the benefit.

What This Means for Visa Holders

If you are arriving in the UK on a Skilled Worker visa and you have not been UK tax resident in the last 10 years, you will likely qualify for FIG.

Here is a typical scenario:

Priya moves from India to the UK in September 2025 on a Skilled Worker visa earning £45,000. She also receives ₹5 lakh per year (about £4,700) in rental income from a flat she owns in Mumbai, and holds shares in Indian companies that pay dividends.

Her UK salary is taxed normally through PAYE. But for her first 4 tax years in the UK, she can claim FIG to exempt the Indian rental income and dividends from UK tax. She can even transfer that money to her UK bank account without triggering any additional charge.

After 4 years, all her worldwide income — including the Indian rental income — becomes fully taxable in the UK.

For visa holders with no foreign income, there is no benefit to claiming FIG (and you would lose your personal allowance), so you should simply not claim it.

After the 4 Years

Once your 4-year FIG window closes, you become taxable on your worldwide income and gains — the same as any other long-term UK resident. There is no extension, no annual charge alternative, and no way to restart the clock.

At that point:

• All foreign income must be reported on your Self Assessment return
• You regain your personal allowance and capital gains annual exempt amount (assuming you stop claiming FIG)
• You may be able to claim double taxation relief if your foreign income is also taxed in another country — the UK has tax treaties with over 130 countries

Planning ahead for this transition is important, especially if you have significant foreign investments. Consider seeking tax advice in your third or fourth year of FIG.

Frequently Asked Questions

Who qualifies for the FIG regime?

Anyone who becomes UK tax resident and has not been UK tax resident in any of the 10 tax years immediately before their arrival year. It does not matter where you are domiciled or what nationality you hold — the test is purely based on your residence history.

Does the FIG regime apply to my UK salary?

No. The FIG regime only covers foreign income and gains — such as overseas rental income, foreign dividends, interest on overseas bank accounts, and capital gains on non-UK assets. Your UK salary paid by a UK employer through PAYE is always subject to UK income tax and National Insurance, regardless of FIG.

What happens after the 4-year FIG period ends?

Once your 4-year FIG window closes, you become taxable on your worldwide income and gains — just like any other UK tax resident. There is no extension. You will need to report all foreign income on your Self Assessment tax return from that point onwards.

Do I need to claim FIG or is it automatic?

You must actively claim FIG each year on your Self Assessment tax return. It is not applied automatically. If you do not file a return or do not make the election, your foreign income and gains will be taxed as normal. Claiming FIG also means losing your income tax personal allowance and capital gains annual exempt amount for that year.

Related Terms

• Non-Domiciled (Non-Dom) Status (Legacy Rules)
• Domicile
• Statutory Residence Test (SRT)
• Temporary Repatriation Facility (TRF)
• PAYE (Pay As You Earn)
• National Insurance Number

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