The New Foreign Income and Gains (FIG) Regime: important changes from April 2025

Date: September 3, 2025

From 6 April 2025, the Foreign Income and Gains (FIG) regime supersedes the remittance basis, transforming how new UK arrivals and returning expatriates are taxed. This represents a Fundamental Shift in UK Tax for Arrival and Returnees. At Alexander & Co, client-focused solutions ensure compliance and strategic positioning in response to this significant change.

Eligibility: Who Qualifies for the FIG Regime?

Qualifying new residents (not UK tax resident for at least 10 consecutive years prior to entry/re-entry) are eligible, this applies equally to foreign nationals and British nationals returning from long-term overseas work.

See detailed Government Guidance: Check if you can claim the 4-year foreign income and gains regime.

How the FIG Regime Works: Key Tax Exemptions and Opportunities

For (up to) four tax years after becoming UK resident, most foreign income and capital gains are exempt, even when brought into the UK—unlike prior remittance rules, where funds had to stay offshore. (Overseas workday relief for overseas employment income is capped at the lower of 30% of employment income and £300,000). This applies to those moving to the UK from April 2025. Those who came to the UK prior to this, can claim up to four years from arriving, but this only applies to the part of those four years from arrival after April 2025.

Practical Scenario

A US-based executive relocates to London, qualifying as a new resident. Foreign investment income and gains (including dividends, rents, and asset sales) earned before and during this four-year window can be transferred to the UK for personal use tax-free during the relief period.

Important Limitations: Planning the Transition

No UK personal allowance for income tax and no capital gains tax annual exemption during the four-year FIG period.

Following the four years, worldwide income and gains become taxable in the UK.

How to Claim the Foreign Income and Gains (FIG) Regime

Relief is not automatic; it must be claimed via the self-assessment tax return each year.

Reliable help: Use HMRC’s step-by-step self-assessment tax return guide or consult our team for detailed assistance.

Overseas Workday Relief: Additional Planning Potential

Overseas Workday Relief (OWR) can offer further tax savings alongside the FIG regime for certain internationally mobile employees.

From April 2025, qualifying employment income can be paid or remitted to the UK and still benefit from exemption, subject to annual caps (30% or £300,000).

Transitional Provisions: Repatriation and Rebasing Explained

Temporary Repatriation Facility (TRF): Temporarily permits remittance of previously protected funds at a reduced tax rate.
CGT Rebasing: Foreign assets may be rebased to 2019 values, lowering future exit costs.

These create unique planning opportunities for individuals holding substantial overseas investments

Foreign Income and Gains (FIG) Regime vs Remittance Basis: What has Changed?

Feature	FIG Regime (2025+)	Remittance Basis (Pre-2025)
Exemption Period	4 years from UK arrival	Up to 15 years, but charges can apply
Bringing Funds to the UK	Permitted tax-free during the exemption	Taxed on remittance
Personal Allowances	Disallowed during FIG	Allowed unless paying Remittance Basis Charge
Complexity	Simpler, less admin	Complex record-keeping is required

Real-World Planning Scenario

Case Study: Returning UK National using the Foreign Income and Gains (FIG) Regime

A British expat moves back to the UK after 15 years in Singapore. By planning ahead, she brings in profits from an offshore property sale and foreign dividends into the UK, all within the four-year FIG window, tax-free. Following her exemption period, she transitions to full UK taxation on new earnings and gains, making early planning and advice essential.

Foreign Income and Gains (FIG) Regime: Inheritance Tax Considerations

The previous remittance basis is now replaced by this four-year exemption to foreign income and gains (from 6 April 2025). Inheritance tax will now follow this new residence-based system. Therefore, a careful review of asset structures is recommended for anyone moving to, or back to, the UK.

Next Steps in reviewing the Foreign Income and Gains (FIG) Regime

For tailored advice on eligibility, transitional planning, or how to claim the FIG regime, contact Alexander & Co today. We will be able to discuss how we can assist you as a client.

Contact Alexander & Co Chartered Accountants for Expert Residency and Inheritance Tax Advice

Alexander & Co is a trusted firm of Chartered Accountants whose experience spans approximately 50 years. Regulated by the ICAEW, the governing body of Chartered Accountants in the UK, you can be assured you are in safe hands.

Our tax services are led by tax partner John McCaffery, a Chartered Accountant who is well regarded for his considerable expertise. We advise on all aspects of UK tax, including domicile issues, international tax from a UK perspective and inheritance tax.

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