UK Non-Dom Reform: The 4-Year FIG Regime Explained (From April 2025)
On 6 April 2025 the UK tore up one of the most famous tax systems in the world. The old "non-domiciled" (non-dom) regime — under which wealthy long-term UK residents could shield foreign income and gains from UK tax indefinitely via the remittance basis — was abolished. In its place is a residence-based system built around a new 4-year Foreign Income and Gains (FIG) regime. For some new arrivals this is a genuine tax holiday on offshore income; for long-standing non-doms it is the end of an era. Here is how the new rules work.
What changed: from domicile to residence
Under the old rules, your domicile status could let you avoid UK tax on foreign income and gains as long as you kept them offshore — in theory for decades. From 6 April 2025, domicile no longer determines income tax or capital gains tax treatment. What matters now is UK tax residence: how long you have lived in the UK.
The headline: the remittance basis is gone, replaced by a time-limited FIG regime for genuinely new arrivals. The UK joins the growing list of countries that tax long-term residents on worldwide income and gains, regardless of domicile.
The 4-year FIG regime: who qualifies
You can claim 100% UK tax relief on foreign income and foreign capital gains arising in your first 4 tax years of UK residence if you:
- become UK tax resident after a period of non-residence of at least 10 consecutive tax years (i.e. you were not UK tax resident in any of the 10 tax years immediately before arrival), and
- are UK tax resident in the year you claim.
If you meet the 10-year non-residence test, the relief is available in each of the first 4 consecutive tax years you are UK resident.
What FIG covers — and the big advantage
"FIG" means foreign income and foreign gains. While you are in the 4-year window:
- eligible foreign income (e.g. dividends, interest, rental income from overseas assets) and foreign capital gains are fully exempt from UK tax;
- unlike the old remittance basis, there is no need to keep FIG offshore — you can bring it into the UK during the 4 years and it remains tax-free;
- claims are made annually, and can be selective by year and by source — you can choose to claim FIG on some foreign income and not other, year by year.
In practice this is a 4-year tax holiday on foreign income and gains for qualifying new residents — simpler and in some ways more generous than the old remittance basis, since there is no need for offshore trust structures or careful non-remittance of funds.
The price of claiming: personal allowance and CGT exemption lost
Claiming FIG is not free. For any tax year in which you claim FIG relief, you lose:
- the personal allowance (currently £12,570 of income taxed at 0%), and
- the capital gains tax annual exempt amount (currently £3,000 of gains taxed at 0%).
Because claims can be made selectively by year, there is a real decision to make: if your foreign income in a given year is small but your UK-source income is large, claiming FIG may cost you more in lost personal allowance than it saves. The selectivity rule lets you sit out years where the maths does not work.
After year 4: worldwide taxation on the arising basis
Once you have been UK tax resident for more than 4 tax years, the holiday ends: your worldwide income and gains are taxed in the UK on the arising basis — i.e. as they arise, wherever they arise, whether or not you bring them to the UK. This is the position most long-term UK residents are already in, and it now applies to former long-term non-doms as well.
Who wins, who loses
Winners — new arrivals with significant foreign income or gains. If you are relocating to the UK (for work, study, or family) and hold overseas investments, a foreign business, or rental property abroad, the 4-year FIG window is genuinely valuable — up to 4 years of tax-free foreign income with no offshore-holding requirement.
Losers — long-term non-doms. People who have lived in the UK for years under the remittance basis are now taxed on worldwide income and gains like everyone else. Some are reassessing whether to stay, accelerate asset sales, or leave before their worldwide position becomes more expensive.
Everyone: inheritance tax has also moved to a residence basis, ending domicile-based IHT planning. If estate planning was part of your non-dom strategy, it needs a fresh review.
Transitional measures: TRF and rebasing
Two transitional reliefs smooth the changeover for people with unremitted pre-April-2025 foreign income and gains:
- Temporary Repatriation Facility (TRF). Previously unremitted foreign income and gains from before 6 April 2025 can be designated and brought to the UK at a flat tax rate: 12% in 2025/26 and 2026/27, and 15% in 2027/28. The TRF window runs for 3 tax years (2025/26 to 2027/28). For someone who kept large balances offshore under the old rules, designating them under the TRF can be far cheaper than remitting them at full rates.
- Rebasing. For disposals made on or after 6 April 2025, non-UK assets can use their 5 April 2017 market value as the cost base for capital gains purposes — wiping out pre-April-2017 gains on qualifying assets.
Both reliefs have detailed eligibility and claiming rules; the rebasing option in particular has qualifying-asset conditions, so check the official guidance before relying on it.
Practical planning notes
- Track your tax-residence history. The 10-year non-residence test is the gate to FIG — keep evidence of residence status for the decade before arrival.
- Do the annual claim maths. Because claiming FIG costs you the personal allowance and CGT annual exemption, run the numbers each year rather than claiming automatically.
- Use the selective-claim rule. You can claim FIG on one foreign source and not another, and in some years and not others.
- Act on the TRF window. It only lasts 3 tax years; designation has to happen within that window.
- Review IHT planning. Residence-based IHT changes long-standing domicile strategies — trusts and wills built around non-dom status need revisiting.
- Get advice before you arrive. The difference between qualifying and not qualifying can be worth six figures — structure, timing, and residence history all matter.
Frequently asked questions
I moved to the UK in 2024 under the remittance basis. Can I use FIG?
It depends on your residence history. FIG requires non-residence in the 10 tax years before arrival — if you were already UK resident in those years, you will not qualify for the new regime. Transitional measures (TRF, rebasing) are the relevant reliefs for you.
Can I really bring foreign income to the UK tax-free during the 4 years?
Yes — that is one of the main simplifications of the new regime. Claimed FIG does not need to stay offshore and can be remitted to the UK tax-free during the 4-year window.
Do I have to claim FIG on all my foreign income at once?
No. Claims are annual and selective — you can claim on particular sources in particular years and choose not to claim in years where losing the personal allowance and CGT exemption would cost more than the relief saves.
What happens if I leave the UK and come back?
The 10-year test looks at the 10 tax years immediately before you become UK resident again. Leaving and returning without a 10-year break will not restart the FIG clock.
Does FIG affect UK inheritance tax?
FIG itself is an income tax / CGT regime, but the same April 2025 reforms moved IHT to a residence basis. Non-dom-based IHT planning (including many offshore trust structures) needs to be reviewed under the new residence rules.
Sources
- HM Government, Changes to the taxation of non-UK domiciled individuals (2024 policy summary): https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals
- Office for Budget Responsibility, Non-doms supplementary release (January 2025): https://obr.uk/docs/dlm_uploads/Non-doms-supplementary-release-Jan-2025.pdf
- OpenAccountants, UK non-dom skills guide: https://www.openaccountants.com/skills/uk-non-dom
- Larking Gowen, Non-domiciled individuals: https://www.larking-gowen.co.uk/what-we-offer/by-service/private-client-trusts-probate/international-tax/non-domiciled-individuals/
- KPMG UK, Budget non-dom reforms going ahead from April 2025: https://kpmg.com/uk/en/insights/tax/tmd-budget-non-dom-reforms-are-going-ahead-from-april-2025.html
This article is general information about UK tax rules, not tax or legal advice. FIG eligibility, annual claiming, and transitional reliefs depend on your individual residence history and circumstances — consult a licensed UK tax adviser before making decisions.