Arriving in the UK
Key points you need to know before relocating to the UK.
The non-dom regime ended on 5th April 2025 and, together with it, the concept of domicile and the complex remittance basis rules.
The new replacement regime is a residence-based scheme, which allows individuals relocating to the UK to be taxed only on their UK source income and gains for the first four tax years, with no UK tax on any foreign income and gains arising in those years, even if brought to the UK. To be within this four-year Foreign Income and Gains (FIG) regime, individuals must be within their first four tax years of UK residence, following a period of 10 tax years consecutive non-UK residence. Interestingly, the new rules apply whether you are coming to the UK for the first time or are returning after a long period overseas.
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Who can qualify to use the new FIG rules?
- Persons who are UK resident under the Statutory Residency Test (any alternative residency derived from a Tax Treaty is ignored), and
- Are within the first four years of UK residency after at least ten years of being non-resident.
Transitional rules apply if you became UK resident within the four years ending on 5th April 2025.
The four-year period begins on 6th April preceding arrival in the UK. This may give rise to an overlap complication with the Split Year Treatment.
You may leave the UK temporarily during the four-year period, but may not claim while non-resident. But you may claim the FIG regime during the remainder of the four years on your return to the UK.
Get in touch for help with the new FIG rules
What income and gains may be the subject of a claim?
- Profits of a trade carried on wholly outside the UK
- Profits of an overseas property business
- Dividends from non-UK resident companies
- Interest paid on an overseas bank account
- Gains made on the disposal of overseas assets
The FIG election covers all overseas income except foreign earnings and foreign employment income. In the year of arrival the Split Year Treatment can put salary (and other overseas income) up to the date of arrival in the UK out of the scope of UK tax. Overseas Workday Relief will fully relieve from UK tax salary paid for work done overseas while UK resident and up to the fourth anniversary of the 6th April preceding arrival in the UK. Overseas Workday Relief is capped at £300,000 per year.
You do not have to include all items above. You may choose to which you want the FIG rules to apply. This may be of advantage if the Tax Treaty allows you to reclaim more tax overseas.
How is a claim made?
A claim to have foreign income and gains dealt with under the new regime is made on the face of the annual UK tax return.
Consequences
While the new regime may permit the new arriver to the UK to have some income free of UK tax, the consequence of an FIG claim is that the following allowances and reliefs will be lost:
- Tax-free allowances for Income Tax, including the Personal Allowance
- Tax-free allowances for Capital Gains Tax
- Married Couples Allowance
- Marriage Allowance
- Blind Person’s Allowance
The application of the FIG regime will also affect the assessment of income for the purposes of calculating entitlement to tax-free childcare and obligations as regards High Income Child Benefit Charge.
Other aspects of the new arrangements are described at Income from abroad.
