Understanding the UK FIG regime: income tax, CGT and IHT from 6 April 2025

The UK’s tax rules for internationally mobile individuals changed significantly from 6 April 2025. The old domicile-based remittance basis has been replaced for new foreign income and gains by a residence-based system known as the Foreign Income and Gains, or FIG, regime. In broad terms, qualifying new residents can claim relief on foreign income and gains for up to four tax years, provided they meet the relevant residence conditions.

What is the FIG regime?

The FIG regime applied from 6 April 2025. It is available to a “qualifying new resident”, which broadly means someone who is UK resident in the year of claim and has not been UK resident in any of the 10 tax years immediately before that year.

If the test is met, relief can be available for up to four years, starting with the first qualifying year of UK residence.

A claim is not automatic. It must be made through Self Assessment, using the SA109 residence and FIG pages and the relevant income or gains pages as needed. HMRC’s current filing notes make clear that the regime has to be actively claimed in the return.

If an individual claims relief under the FIG regime for a tax year, they forfeit their UK Personal Allowance and their Capital Gains Tax Annual Exempt Amount for that year.  

How does FIG work for income tax?

For income tax, the FIG regime can provide 100% relief on qualifying foreign income arising in the relevant claim year. The practical effect is that, where the conditions are met and a valid claim is made, qualifying foreign income can be relieved from UK tax during the four-year window.

HMRC also makes clear that, from 6 April 2025, UK residents are otherwise taxed on the arising basis on their worldwide income and gains unless a specific FIG claim is available.

One of the major practical differences from the old remittance basis is that the new FIG regime is not based on keeping funds offshore. For qualifying FIG amounts, the historic remittance-based restriction does not apply in the same way. This makes the regime more straightforward for new arrivals who may need to support UK expenditure or move cash into the UK.

How does FIG work for capital gains tax?

The same broad framework applies for capital gains tax. If an individual is a qualifying new resident and makes a valid FIG claim, relief can apply to qualifying foreign gains arising in the four-year period. As with foreign income, this is a claim-based system and needs to be reflected correctly in the return.

This is a useful planning tool, but it does not mean older offshore positions disappear. Pre-6 April 2025 foreign income and gains still need separate analysis, especially where the individual previously used the remittance basis or holds mixed offshore funds.

What changed for inheritance tax?

Inheritance tax changed as well. From 6 April 2025, the key test for whether non-UK assets are within scope is no longer mainly common law domicile. Instead, the system looks at whether the individual is a long-term UK resident. A person becomes long-term UK resident if they have been UK resident in at least 10 of the previous 20 tax years.

There can be a tail period after departure, meaning an individual may remain within scope for IHT on non-UK assets for a period after leaving the UK, depending on how long they were resident before departure. 10 consecutive years of non-residence effectively resets the long-term residence test.

Does clean capital still matter?

Yes, but less than it did under the old remittance basis for new qualifying FIG amounts.

Because qualifying FIG can generally be brought to the UK during the four-year window, clean capital is no longer the central concept for every new foreign receipt. However, it still matters for legacy offshore funds, mixed accounts and any pre-6 April 2025 income or gains.

That is why account segregation and source-of-funds records remain important. The new regime is more flexible for new foreign income and gains, but historic positions still need care.

Should foreign funds always be brought to the UK?

Not necessarily. One advantage of FIG is that qualifying funds can be brought to the UK without the old remittance friction. But that does not mean there is always a commercial reason to do so. In many cases, the better question is simply whether the funds are actually needed in the UK.

Key takeaways

The FIG regime is one of the most important changes to UK personal taxation for internationally mobile individuals in recent years. It offers a valuable four-year window for qualifying new residents, changes the way foreign income and gains are taxed, and sits alongside a new long-term residence test for IHT.

Anyone arriving in the UK, returning after a long absence, or reviewing offshore structures should consider the new rules carefully and make sure claims are made correctly.