The FIG Regime: What Returning UK Expats Need To Know

If you are a UK expat returning after an extended period overseas, the Foreign Income and Gains (FIG) regime may provide relief from UK tax on qualifying foreign income and gains for a fixed four-tax-year period. Eligible amounts can also generally be brought into the UK without triggering an additional UK tax charge.

The timing of your return can therefore affect how much use you can make of the regime, particularly if you hold substantial overseas investments, expect to realise foreign gains, have accumulated historic offshore funds or have interests in offshore trusts.

This article explains who qualifies for the FIG regime, how the four-year relief works, how to claim it and how the rules interact with other provisions that may affect your return to the UK.

What Is the FIG Regime?

The FIG regime is a UK tax relief introduced by the Finance Act 2025, replacing the former domicile-based remittance regime from 6 April 2025.

Under the new rules, eligible individuals can claim relief from UK tax on qualifying foreign income and gains within a fixed four-tax-year period. The period starts with the tax year in which they first become a UK resident after at least ten consecutive tax years of non-UK residence.

Unlike the previous remittance basis, the FIG regime does not require relieved foreign income and gains to remain outside the UK. Eligible individuals can generally bring amounts that have benefited from FIG relief into the UK without triggering an additional UK tax charge.

The four-year window is fixed. You do not have to claim the relief in every eligible year, but skipping a year does not extend the period. Once the four-year period has ended, FIG relief is no longer available unless you later complete a new period of at least ten consecutive tax years of non-UK residence before becoming a UK resident again.

UK residents are otherwise generally taxed on their worldwide income and gains as they arise.

The FIG Regime at a Glance

For returning expatriates, the important point is that the FIG regime is a temporary planning window rather than an ongoing tax status. Decisions taken before the first UK-resident tax year, and during the four years that follow, can affect how much use can be made of the regime.

The Rules Before 6 April 2025

Before 6 April 2025, qualifying UK residents who were non-UK domiciled could elect to be taxed under the remittance basis.

Broadly, UK-source income and gains were subject to UK tax, while relevant foreign income and gains within the remittance basis were generally taxed in the UK if they were remitted. Foreign income and gains that remained offshore could generally remain outside the UK tax charge, subject to detailed remittance, attribution and anti-avoidance rules.

From 6 April 2017, a £30,000 annual Remittance Basis Charge generally applied where an individual claiming the remittance basis had been UK resident in at least seven of the preceding nine tax years. This increased to £60,000 where they had been UK resident in at least 12 of the preceding 14 tax years.

Eligibility was also restricted by the deemed-domicile rules. From 6 April 2017, an individual who had been a UK resident for at least 15 of the previous 20 tax years was generally treated as UK domiciled for these purposes and could no longer continue using the remittance basis in the same way.

The practical distinction under the FIG regime is that eligibility is based on previous residence rather than domicile, and qualifying income and gains do not have to remain offshore to preserve the relief. The available period, however, is limited to four tax years.

Who Qualifies for the Four-Year FIG Regime?

The primary requirement is that an individual becomes a UK resident after having been non-UK resident for at least ten consecutive tax years immediately beforehand.

The regime applies regardless of domicile status. Eligibility for the new FIG regime is based principally on residence history.

Your UK tax residence status is determined by the Statutory Residence Test (SRT). If you spend 183 days or more in the UK during a tax year, you will generally be a UK resident under the SRT without needing to consider the remaining residence tests. In other cases, factors including days spent in the UK, your home, employment and UK ties may determine your position.

For someone planning a return, the practical question is not simply whether UK residence will arise, but when the first UK-resident tax year will begin for FIG purposes.

If you return to the UK during a tax year, you may qualify for split-year treatment. However, where you are a UK resident under the SRT for that tax year, it still counts as a UK-resident year when determining your FIG eligibility period. Split-year treatment does not allow the four-year FIG clock to start partway through a tax year.

Treaty residence is a separate question. Being treated as resident in another country under a double tax treaty does not by itself replace the SRT test used to establish whether you are a qualifying new resident for FIG purposes.

Individuals whose four-year period started before 6 April 2025 may still be able to claim FIG relief for the remaining part of that period. For example, an individual who first became a UK resident in 2022/23 after at least ten consecutive years of non-UK residence may potentially use the FIG regime in 2025/26, which is the fourth year of that residence period.

Temporary non-residence during the four-year window does not extend it. For example, if you are a UK resident in 2026/27, non-resident in 2027/28 and UK resident again in 2028/29, the four-year period still runs from 2026/27 to 2029/30. Subject to meeting the relevant conditions, you could claim FIG relief for the UK-resident years 2026/27, 2028/29 and 2029/30.

This makes the date on which UK residence begins particularly relevant for expatriates planning a return. Returning late in a tax year can still use up the first year of the four-year FIG period.

What Foreign Income and Gains Can Qualify for FIG Relief?

Relief under the four-year FIG regime applies only to qualifying foreign income and gains.

What Foreign Income Can Qualify?

Qualifying income can include:

• Foreign pension income, except where specifically excluded.
• Profits of a trade conducted entirely outside the UK.
• Income from an overseas property business.
• A UK-resident partner’s share of the profits from a firm trading entirely outside the UK.
• Dividends received from companies not resident in the UK.
• Interest, for instance interest earned on a foreign bank account.

What Foreign Gains Can Qualify?

Qualifying gains can include:

• Foreign asset gains.
• Certain gains of non-UK resident close companies attributed to UK residents.
• Qualifying Asset Holding Company (QAHC) gains.
• Certain gains attributed to settlers of non-resident settlements.
• Certain gains attributed to beneficiaries of non-resident settlements.

Foreign income and gains qualify only if they arise or accrue on or after 6 April 2025. FIG relief cannot be used for foreign income or gains that arose before this date.

This distinction is especially relevant for former remittance-basis users. Pre-6 April 2025 foreign income and gains that remain unremitted do not become eligible for FIG relief simply because the individual subsequently qualifies for the new regime. Those historic amounts may instead remain within the former remittance rules unless they qualify for treatment under the Temporary Repatriation Facility discussed later in this article.

Certain types of income are excluded from FIG relief, including:

• Certain income arising under the settlements legislation.
• Performance income.
• Transferred income streams.
• Income from a security treated as situated in the UK where there has been a share exchange involving a non-UK incorporated close company.
• Certain types of foreign pension income.

The treatment of trust income and income arising under the Transfer of Assets Abroad rules is more complex. Some foreign income attributed under those provisions can qualify for FIG relief, subject to the relevant conditions.

Can You Bring FIG-Relieved Income and Gains to the UK?

Yes. One of the central differences between the FIG regime and the former remittance basis is that qualifying foreign income and gains that have received FIG relief can generally be brought into the UK without an additional UK tax charge arising simply because they have been remitted.

There is therefore no general requirement to leave FIG-relieved amounts offshore to preserve the relief.

This can be relevant when planning how overseas investment income, sale proceeds or other qualifying funds will be used after a return to the UK.

The position is different for foreign income and gains that arose before 6 April 2025. Those amounts do not qualify for FIG relief and may remain subject to the former remittance-basis rules unless another provision, such as the Temporary Repatriation Facility, applies.

How Do You Claim FIG Relief?

FIG relief does not apply automatically. It must be actively claimed through Self Assessment for each tax year in which you want to use it.

The relevant FIG claim is made through the Residence and Foreign Income and Gains pages of the tax return, SA109. The amount of relief must also be reported on the appropriate supplementary pages depending on the type of income or gain involved.

A claim for foreign income and a claim for foreign gains are treated separately. It is therefore possible to claim relief only on foreign income, only on foreign gains, or on both.

You do not have to claim relief on every source. Instead, you identify the amount of qualifying foreign income or gains from each relevant source on which you want relief.

There is no overall monetary cap on FIG relief.

A FIG claim also affects the treatment of losses. In a year in which FIG relief is claimed, certain foreign income losses cannot be claimed and qualifying foreign capital losses cease to be allowable losses.

Foreign Tax Credit Relief is not available against foreign income for which FIG relief is claimed.

You do not have to make a claim in every qualifying year. A claim can also be made or amended after the end of the relevant tax year provided it is within the statutory time limit. Choosing not to claim for one of the four years does not allow that year to be carried forward.

The standard deadline for making a FIG claim is the anniversary of 31 January following the normal Self Assessment filing deadline. For example, for the 2025/26 tax year the normal filing deadline is 31 January 2027, so the FIG claim deadline is 31 January 2028.

Should You Claim FIG Relief Every Year?

Not necessarily. A FIG claim should be considered on a year-by-year basis because claiming the relief can involve giving up other UK allowances and reliefs.

For a year in which you make a FIG claim, you lose certain UK allowances and reliefs, including:

• The Personal Allowance, currently £12,570.
• The Capital Gains Tax Annual Exempt Amount, £3,000 for the 2026/27 tax year.

The same loss of these allowances can arise whether the claim relates to foreign income, foreign gains or both.

Depending on your circumstances, other allowances or tax reductions may also be affected.

Before claiming FIG relief, you should therefore compare the UK tax that would otherwise arise on your foreign income and gains with the value of the allowances and other reliefs you would give up.

For someone returning with significant foreign investment income or gains, the FIG exemption may considerably outweigh the value of the lost allowances. Where the foreign amounts are relatively small, making a claim may be less attractive.

The decision can also affect pension contribution tax relief, Foreign Tax Credit Relief and the availability of foreign losses. The calculation should therefore not be based solely on the Personal Allowance and CGT Annual Exempt Amount.

Where tax remains payable in another jurisdiction, the wider cross-border position may also need to be considered. FIG relief determines the UK treatment of qualifying income and gains; it does not determine how another country will tax the same income, gain, asset or structure.

What Other Provisions Were Introduced as Part of the April 2025 Reforms?

The FIG regime formed part of a wider set of changes affecting internationally mobile individuals.

For returning expatriates, the provisions need to be considered according to what they apply to and when they are available.

These provisions address different parts of an expatriate’s financial position. For example, FIG generally concerns new qualifying income and gains, while the TRF may be relevant to historic offshore amounts accumulated under the former remittance basis.

Overseas Workday Relief (OWR)

Overseas Workday Relief remains available to qualifying employees with overseas employment duties, but the rules changed significantly from 6 April 2025.

Under the revised regime, qualifying foreign employment income attributable to duties performed outside the UK can benefit from relief. For most individuals under the new rules, the amount of OWR available for a qualifying year is capped at the lower of:

• 30% of the relevant qualifying employment income; or
• £300,000.

Payment into a UK bank account does not prevent qualifying overseas-workday income from receiving relief. The employer can also be UK-based.

The relief applies to qualifying employment income and does not extend to self-employment or trading profits.

Eligibility for the new OWR regime is generally aligned with the FIG regime’s qualifying new resident conditions. Broadly, you must have been a non-UK resident for ten consecutive tax years before becoming a UK resident.

OWR can be available within the same four-year residence window as the FIG regime, compared with the previous OWR rules, which broadly operated for the first three years of UK residence.

It is possible to use OWR and FIG relief in the same tax year where the relevant conditions are met, but the same income cannot receive relief twice.

Special transitional rules apply where an individual was already using OWR before 6 April 2025.

Individuals who became UK residents in 2023/24 or 2024/25 and met the previous OWR and remittance-basis requirements may continue to qualify under transitional provisions. For tax years from 6 April 2025, their relief is given under the new OWR regime rather than under the former remittance-basis rules.

Certain transitional cases are not subject to the £300,000 or 30% annual financial limit.

By contrast, an individual who became a UK resident in 2022/23 and used the former OWR regime cannot obtain OWR for 2025/26 under the transitional rules, even if they otherwise qualify for FIG relief in that year.

Temporary Repatriation Facility (TRF)

The Temporary Repatriation Facility is available to qualifying former remittance-basis users who hold certain pre-6 April 2025 foreign income and gains.

Because those historic amounts arose before the FIG regime took effect, they cannot be relieved under a FIG claim. Instead, qualifying overseas capital can be designated under the TRF and taxed at a reduced flat rate.

The TRF can also apply to certain amounts connected with offshore trusts and other overseas structures. This can include specified capital payments, benefits and other amounts linked to pre-6 April 2025 foreign income or gains, although the detailed trust and matching rules determine how much is eligible to be designated.

An important distinction is that the TRF operates through designation. You do not generally have to physically remit designated qualifying overseas capital to the UK during the three-year TRF period.

Once a qualifying amount has been designated and the TRF charge paid, it can generally be remitted in the year of designation or in a later tax year without a further UK tax charge on that remittance.

Timing still matters. If you remit a pre-6 April 2025 amount during the TRF period but fail to make the corresponding designation for that tax year, the normal remittance rules may apply. A later designation will not ordinarily undo a tax charge that has already arisen on an earlier remittance.

The TRF designation facility applies to the 2025/26, 2026/27 and 2027/28 tax years. Amounts that remain undesignated continue to be dealt with under the applicable remittance-basis rules when remitted.

For long-term expatriates who have accumulated historic offshore income, gains or mixed funds, the distinction is important:

• FIG relief generally concerns qualifying foreign income and gains arising from 6 April 2025 onwards.
• The TRF can provide a route for dealing with certain qualifying pre-6 April 2025 amounts.

These two pools of wealth may therefore require different planning.

Capital Gains Tax (CGT) Rebasing

The April 2025 reforms also introduced a CGT rebasing provision for certain former non-UK domiciled individuals.

Qualifying individuals can use the market value of certain foreign assets at 5 April 2017 when calculating gains on disposals made from 6 April 2025 onwards. Depending on how the asset has moved in value, this may reduce the gain exposed to UK Capital Gains Tax.

To qualify for this rebasing treatment, the principal conditions include that:

• You were not UK domiciled at any time in a tax year before 2025/26.
• You claimed the remittance basis in at least one tax year between 2017/18 and 2024/25.
• You held the relevant asset personally on 5 April 2017.
• The disposal takes place on or after 6 April 2025.
• The asset was not situated in the UK at any time between 6 March 2024 and 5 April 2025.

The statutory conditions should be checked carefully before relying on the 5 April 2017 value.

If you are within your four-year FIG period and make a valid FIG claim in respect of a qualifying foreign gain on the disposal, rebasing may be less relevant for that particular gain because FIG relief may remove the UK CGT charge.

It may become more important where a disposal takes place after the FIG period has ended, or where FIG relief is not claimed.

For an expatriate returning with a substantial foreign portfolio, planned asset disposals should therefore be considered in the context of both the four-year FIG period and any available rebasing treatment.

How Are Offshore Trusts Treated Under the FIG Regime?

The April 2025 reforms significantly changed the UK tax treatment of offshore trusts and their underlying structures.

Before 6 April 2025, qualifying offshore trusts established by non-UK domiciled individuals could benefit from statutory trust protections. Broadly, protected foreign-source income arising within a qualifying structure was not automatically attributed to the UK-resident settler as it arose, provided the statutory conditions continued to be met.

Tax could instead arise when relevant benefits were received and matched against accumulated protected income.

Those trust protections were removed from 6 April 2025.

This is separate from the new FIG regime. A UK-resident settlor can now potentially be taxed on income arising within a non-resident trust or its underlying entities where the relevant settlements or Transfer of Assets Abroad charging provisions apply, even where the income remains offshore.

Separate changes also affect the attribution of gains arising in non-resident trusts.

A qualifying new resident may, however, be able to claim FIG relief on certain eligible foreign income or gains attributed to them during the four-year FIG period. FIG relief can also apply to certain gains attributed to qualifying settlers or beneficiaries of non-resident settlements.

This does not make an offshore trust tax-free for four years, nor does it mean a trust can automatically be wound up or restructured without a UK tax charge.

The treatment depends on the income and gains that have arisen, when they arose, the relevant charging provision, historic trust pools, distributions and benefits, and the applicable matching rules.

Pre-6 April 2025 protected foreign-source income and historic gains can continue to be relevant when later benefits or capital payments are made.

For internationally mobile individuals returning to the UK, the four-year FIG period can provide an opportunity to review existing offshore structures before the relief expires.

Any proposed distributions, restructuring or winding-up should first be tested against the relevant UK trust, Transfer of Assets Abroad, capital gains and TRF rules, as well as the tax rules in any other jurisdiction involved.

Once FIG eligibility ends, qualifying relief is no longer available simply because the trust remains offshore. A UK-resident settler may then face UK tax on relevant foreign trust income and gains as they arise where the statutory attribution rules apply.

What About Inheritance Tax?

The FIG regime deals with Income Tax and Capital Gains Tax. It should not be confused with the separate changes to UK Inheritance Tax that also took effect from 6 April 2025.

The former domicile-based IHT framework was replaced by a long-term residence test for overseas assets. Broadly, an individual is a long-term UK resident for IHT purposes where they have been a UK resident for at least ten of the 20 tax years immediately preceding the tax year in which the relevant chargeable event occurs.

Importantly for FIG-eligible returnees, ten consecutive tax years of non-UK residence effectively resets this test. An individual returning after the ten-year period of non-UK residence required for FIG will therefore not immediately be treated as a long-term UK resident for these purposes.

This matters for high-net-worth expatriates because qualifying for FIG relief does not itself keep foreign assets outside the UK IHT regime indefinitely.

The position can be especially important where offshore trusts are involved, as the IHT treatment of foreign trust property depends on separate residence, settlement and transitional rules.

For someone returning after at least ten consecutive years of non-UK residence, FIG and IHT planning therefore operate on different timelines and should be considered separately.

What Should You Review Before Returning to the UK?

If you are returning with foreign investments, business interests, historic offshore funds or trust structures, it can be useful to review the different tax timelines before UK residence begins.

The issues to consider will depend on your circumstances, but the following points can help frame that review.

1. Establish when UK residence is likely to begin

Determine your likely position under the Statutory Residence Test and whether the tax year in which you return will count as the first year of the four-year FIG period.

Returning late in a tax year does not necessarily preserve that year for later use.

2. Confirm your ten-year non-residence history

FIG eligibility depends on at least ten consecutive tax years of non-UK residence before becoming a UK resident.

Your residence history should therefore be established before relying on the four-year relief period.

3. Separate historic offshore wealth from new FIG

Identify foreign income and gains that arose before 6 April 2025 separately from qualifying income and gains expected to arise afterwards.

This distinction can determine whether an amount may fall within the FIG regime, the TRF or the former remittance rules.

4. Review planned investment income and disposals

Consider when significant foreign dividends, interest, business income or capital gains are expected to arise.

If you hold foreign assets that may qualify for CGT rebasing, the timing of a disposal may also affect the tax position.

5. Review offshore trusts and underlying structures

Where you are a settler or beneficiary of an offshore trust, consider the effect of the removal of protected trust status, historic income and gain pools, planned benefits or distributions, and the availability of FIG relief during the four-year period.

6. Consider Overseas Workday Relief

If you will continue to perform employment duties outside the UK after returning, consider whether OWR may apply and how it interacts with the FIG period.

7. Review historic funds that may qualify for the TRF

Former remittance-basis users may need to identify pre-6 April 2025 foreign income, gains or mixed funds that could qualify for designation under the Temporary Repatriation Facility.

The TRF timetable is separate from the four-year FIG period.

8. Consider the separate Inheritance Tax timeline

FIG eligibility and IHT long-term residence are different tests. For individuals with substantial overseas assets or trust structures, both timelines should be considered as part of the return plan.

Where assets, income or structures remain subject to tax in another country, the tax rules and treaty position in that jurisdiction may also need to be considered alongside the UK analysis.

Why Timing Your Return Can Matter

For returning expatriates, several tax periods may overlap after 6 April 2025.

The FIG regime provides a fixed four-tax-year window beginning with the first UK-resident tax year after the required ten-year non-residence period.

The TRF is available only for the 2025/26, 2026/27 and 2027/28 tax years, although qualifying amounts designated during that period can generally be remitted later.

OWR has its own employment and residence conditions, while IHT applies a separate long-term UK residence test.

For individuals holding substantial foreign investments, business interests, accumulated offshore income or trusts, the date of return can therefore affect how much time remains to reorganise assets, realise gains, receive income or consider distributions while particular reliefs remain available.

The tax consequences will depend on the facts, so the return date should ideally be considered before UK residence has already been triggered.

What Happens After the Four-Year FIG Period Ends?

Once the fixed four-tax-year FIG period has ended, you cannot continue claiming FIG relief simply because qualifying foreign assets, income or structures remain outside the UK.

UK residents are otherwise generally taxed on their worldwide income and gains as they arise. Foreign investment income and gains that might have qualified for FIG relief during the four-year period may therefore become subject to the normal UK tax rules once that period expires.

This can also affect offshore trusts. Where the relevant statutory attribution rules apply, a UK-resident settler may face UK tax on relevant foreign trust income and gains after FIG relief is no longer available.

The end of the FIG period can therefore change the tax treatment of an existing cross-border wealth structure without any corresponding change to the underlying investments or entities.

For returning expatriates with substantial overseas wealth, the four years should be viewed as a defined planning period. Decisions about asset ownership, investment income, disposals, trust distributions and other cross-border arrangements may need to be reviewed before the relief expires rather than left until the fifth year of UK residence.