FIG Regime: The UK's Four-Year Tax-Free Rules

What Is the FIG Regime?

The FIG regime the four-year foreign income and gains regime is a UK tax relief that lets qualifying new residents avoid UK tax on their foreign income and gains for their first four years of UK residence. It replaced the remittance basis on 6 April 2025.

The foreign income and gains regime is the UK's replacement for the long-standing remittance basis of taxation, which allowed non-domiciled residents to keep foreign income and gains outside the UK tax net so long as the money was not brought into the country. That system was abolished, and from 6 April 2025 a new, residence-based relief took its place. The FIG regime does away with the old concept of domicile entirely and asks a simpler question: are you a genuinely new arrival to the UK?

The idea is to make the UK attractive to people relocating here after building a life and wealth elsewhere. For a limited window four years a qualifying resident can claim relief so that foreign income and foreign gains are simply not taxed in the UK. Crucially, and unlike the old remittance basis, this applies whether you bring that money into the UK. You can remit foreign income and gains freely during the FIG period without triggering a UK charge on them.

HMRC's guidance confirms that the foreign income and gains regime replaced the remittance basis on that date and that, where a valid claim is made, you will not pay tax on your eligible foreign income and gains. It is a clean break from the domicile-based past and a much more predictable regime for internationally mobile people and their advisers to plan around.

Who Qualifies for the Foreign Income and Gains Regime?

You qualify if you are a UK tax resident who has been non-UK resident for at least the 10 consecutive tax years immediately before arriving. If you meet that test, the FIG regime is available for your first four years of UK residence.

Eligibility for the FIG regime turns on being what HMRC calls a “qualifying resident.” There are two conditions, and you must meet both. First, you must be UK tax resident under the statutory residence test the day-counting and connecting-factors test that decides UK residence. Second, you must be within your first four years as a UK tax resident, following a period of at least ten consecutive tax years in which you were not a UK tax resident.

That ten-year “look-back” is the gateway. It does not matter whether you have never lived in the UK before or lived here years ago and left what matters is that you have been non-resident for the ten tax years running up to your arrival. Meet that, and the four-year clock starts in the first tax year you become UK resident. The relief is available for those four consecutive years and no longer; it is tied to when your UK residence began, not to when you first make a claim.

There are transitional rules for people whose four-year period had already begun before the regime started on 6 April 2025. In that case you can use the foreign income and gains regime from the 2025 to 2026 tax year up to and including the final year of your original four-year window so if your residence began earlier, you may have fewer than four years of relief available. HMRC gives the example of someone resident from 2022 to 2023 who, because the regime only began in 2025 to 2026, has just a single year of eligibility left.

What Does Claiming the FIG Regime Cost You?

Claiming means giving up your tax-free personal allowance for Income Tax and your Capital Gains Tax annual exempt amount for that year, along with the married couple's, marriage, and blind person's allowances if you would otherwise get them.

The foreign income and gains regime is valuable, but it is not free. In any year you make a claim, HMRC withdraws several allowances. You lose the income tax personal allowance and the capital gains tax annual exempt amount for that year. You also lose the Married Couple's Allowance, the Marriage Allowance, and the Blind Person's Allowance if you would otherwise have been entitled to them. For someone with modest foreign income, the value of these lost allowances can exceed the tax saved, which is exactly why the year-by-year, source-by-source choice matters.

There is a second, subtler cost. Making a claim under the FIG regime means your foreign income is considered when working out your adjusted net income. That figure drives several means-tested entitlements and charges: your access to tax-free childcare and free childcare for working parents, and your exposure to the High-Income Child Benefit Charge. A claim that looks tax-efficient in isolation can therefore have knock-on effects on childcare support or child benefit that need to be weighed in the round.

The practical takeaway is that the foreign income and gains regime rewards deliberate planning rather than a reflexive claim. For a new arrival with large foreign investment income or a significant foreign gain, the relief will usually dwarf the lost allowances. For someone with only small amounts of foreign income, claiming may cost more than it saves. Running the numbers both ways, each year, is the only way to be sure.

How Does the FIG Regime Differ from the Old Remittance Basis?

The remittance basis only sheltered foreign income and gains kept outside the UK and depended on domicile; the FIG regime ignores domicile, applies whether you remit the money, but lasts only four years rather than potentially decades.

The change from the remittance basis to the foreign income and gains regime is more than cosmetic. Under the old system, a non-domiciled resident could shelter foreign income and gains from UK tax only for as long as the money stayed offshore; bringing it into the UK “remitting” it triggered a charge, and long-term users eventually had to pay an annual remittance basis charge to keep the treatment. It could, in principle, run for many years, tied to the slippery concept of domicile.

The FIG regime is simpler and, for the right person, more generous in the short term. There is no remittance test at all you can bring your foreign income and gains into the UK during the four years without any UK charge on them. And there is no domicile question and no annual charge to preserve access. The trade-off is time: where the remittance basis could last a long time, the foreign income and gains regime is strictly four years and then stops.

For people who were already in the UK under the remittance basis when the rules changed, transitional reliefs were introduced to smooth the shift including a temporary facility to bring previously untaxed foreign income and gains into the UK at reduced rates, and rebasing of certain foreign assets for capital gains purposes. These transitional measures are complex and time-limited, and anyone who used the remittance basis in the past should take advice on how they interact with the new foreign income and gains regime rather than assume the old planning still holds.

Why Is the FIG Regime Complicated for US Citizens?

Because the US taxes its citizens on worldwide income regardless of UK residence, a US person claiming the FIG regime may pay no UK tax but still owe US tax on the same foreign income and gains and UK tax exempted under the regime cannot be credited against that US bill.

The foreign income and gains regime is designed around UK residence, but it collides awkwardly with the US system of citizenship-based taxation. A US citizen or green card holder living in the UK remains liable to US tax on their worldwide income and gains no matter where they live. So, while the FIG regime can switch off the UK tax on foreign income and gains, it does nothing to switch off the parallel US charge.

This creates a specific trap. Normally, cross-border double taxation is relieved by crediting the tax paid in one country against the tax due in the other. But if the UK charges no tax on a slice of foreign income because you claimed the foreign income and gains regime, there is no UK tax to credit against your US liability. The result can be that a US person claiming the FIG regime ends up paying more total tax than if they had let the UK tax the income and claimed a foreign tax credit in the US. The relief that helps a non-US arrival can actively harm a US one.

For US-connected individuals, the decision to claim the foreign income and gains regime therefore cannot be taken on the UK numbers alone. It must be modelled across both tax systems together, weighing the UK saving against the US cost and the loss of creditable UK tax. This is precisely the kind of situation where specialist US-UK cross-border advice is essential rather than optional, because the intuitive move claim the relief can be the wrong one.

Should You Claim the FIG Regime Yourself or Get Help?

A simple case a non-US new arrival with clear-cut foreign income and no complex assets — can be handled with care through Self-Assessment. Anything involving US status, trusts, transitional remittance-basis history, or large mixed portfolios warrants professional cross-border advice.

For a straightforward new arrival someone with no US connection, a clean ten-year period of non-residence, and simple foreign income such as overseas dividends or a foreign rental property understanding and claiming the foreign income and gains regime through Self-Assessment is manageable, especially with the HMRC guidance to hand. The annual, source-by-source claim is the main thing to get right, along with weighing the lost allowances.

The picture changes quickly where complexity appears: US or other dual tax exposure, offshore trusts, a history under the old remittance basis and its transitional reliefs, or a large portfolio mixing UK and foreign assets. In these cases, the interaction between the FIG regime and the rest of the tax landscape is intricate, and a wrong claim can be costly and, in some situations, hard to undo. A cross-border specialist who works with the foreign income and gains regime routinely will usually save far more than they cost by getting the timing, the source selection, and the cross-border credit position right.

Whichever route you take, the responsibility for an accurate return remains yours, and the four-year clock is unforgiving. The sensible approach is to match the level of help to the complexity careful self-filing for the simple case, a specialist for anything involving US status or legacy non-dom arrangements and to treat the FIG regime as a planning opportunity with a deadline rather than a box to tick each spring.

Frequently asked questions

Conclusion

The FIG regime is the defining feature of the UK's post-non-dom tax landscape: a clean, residence-based, four-year window in which qualifying new arrivals can take their foreign income and gains free of UK tax, remitted or not. Understand its shape and the planning becomes clear a ten-year non-residence gateway, a strict four-year limit, an annual and selective claim, and a real cost in lost allowances that must be weighed each year. The foreign income and gains regime rewards those who plan deliberately and punish those who claim on autopilot, and for US citizens it can quietly do more harm than good. The real risk is not the relief itself but misjudging it claiming when allowances were worth more, missing the four-year deadline, or ignoring a US tax bill that the UK relief leaves fully exposed. Learn how the FIG regime fits your own circumstances, claim the right sources in the right years, and bring in a cross-border specialist wherever US status or legacy non-dom history is in play. Do that, and the foreign income and gains regime becomes a genuine opportunity rather than a trap with a deadline.