The Four-Year FIG Regime Explained
The UK's four-year FIG regime replaced the remittance basis from April 2025. Our guide covers who qualifies, what it covers, the cost, and the US complication.
The UK abolished the long-standing remittance basis for non-domiciled residents from 6 April 2025, replacing it with a residence-based system. At its centre is the four-year foreign income and gains (FIG) regime — a time-limited window in which qualifying new arrivals can bring foreign income and gains to the UK without a UK tax charge. For internationally mobile individuals, and especially for US citizens who cannot escape US tax on the same income, understanding how the FIG regime works is now essential to planning a move to the UK. This guide explains eligibility, what the regime covers, the four-year clock, and the cross-border traps. It is general information only and does not replace personalised advice.
Key takeaways
- The remittance basis ended on 5 April 2025; the four-year FIG regime replaced it for new arrivals from 6 April 2025.
- To qualify, you must have been non-UK resident for the previous 10 consecutive tax years before becoming UK resident.
- Qualifying foreign income and gains can be received free of UK tax for the first four years of UK residence — even if remitted to the UK.
- The relief is claimed on a tax return, and claiming it means giving up personal allowances and the CGT annual exempt amount for that year.
- US citizens cannot use the FIG regime for US purposes — the IRS still taxes worldwide income — so a UK exemption can create a mismatch.
The end of the remittance basis
For decades, UK-resident but non-domiciled individuals could elect the remittance basis — paying UK tax on foreign income and gains only if and when they brought the money into the UK. From 6 April 2025 that regime was abolished for most purposes. UK residence, not domicile, now drives how foreign income and gains are taxed.
In its place, the four-year FIG regime gives genuinely new arrivals a short, generous window before the full worldwide basis applies. After that window, a UK resident is taxed on worldwide income and gains as they arise, in line with most other major tax systems.
Who qualifies, and for how long
The regime is aimed at people arriving in the UK after a long period abroad. The core test is a 10-year "clean break": you must have been non-UK resident for the 10 consecutive tax years immediately before the year you become UK resident.
Where the test is met, the regime is available for the first four consecutive tax years of UK residence. The clock is fixed to those first four years — it does not pause if you leave and return partway through.
| Feature | Old remittance basis | Four-year FIG regime |
|---|---|---|
| Driver | Domicile | Residence |
| Entry test | Non-dom status | 10 years non-resident |
| Duration | Up to 15 years (with charges) | First 4 years only |
| Remittance | Taxed when remitted | Can remit FIG UK-tax-free |
| Cost | Remittance basis charge | Loss of allowances that year |
What the regime covers — and its cost
During the four-year window, qualifying individuals can elect for foreign income and foreign gains to be excluded from UK tax — and, unlike the old remittance basis, the money can be brought into the UK freely without triggering a charge. This is a meaningful simplification for those with overseas earnings, investments, or business interests.
The relief is not automatic — it is claimed for each year on the Self Assessment return, and claiming it for a year means giving up the personal allowance for income tax and the annual exempt amount for CGT in that year. For someone with little foreign income in a given year, claiming may cost more than it saves, so the decision is taken year by year.
UK income and UK gains remain taxable in the normal way throughout — the regime only affects the foreign element.
The US complication
For US citizens and green-card holders, the FIG regime solves a UK problem but not a US one. The IRS taxes worldwide income regardless of UK residence or any UK election, so foreign income that the UK agrees to exempt under FIG is still fully taxable in the US.
This creates a mismatch: because the UK is not taxing that income, there is no UK tax to credit against the US liability, so the US foreign tax credit may be reduced or unavailable on that income. In some cases a US person is better off not claiming FIG, precisely so that UK tax arises and can be credited in the US. These decisions need UK and US analysis together — optimising one side in isolation can raise the overall bill.
Frequently asked questions
Who can use the four-year FIG regime?
Can I still use the remittance basis?
Can I bring the money into the UK tax-free?
What does claiming the relief cost me?
Does FIG help me if I'm a US citizen?
Moving to the UK from abroad?
We help internationally mobile individuals — including US citizens — plan the four-year FIG regime alongside their US filing so the two systems work together. Get in touch before your arrival year.
Speak to a cross-border tax specialist