Foreign Income and Gains Regime

This represents a significant tax saving opportunity for anyone moving to the UK if they had been residing overseas for 10 or more years.

Key points:

• Overseas income and gains claimed as exempt in the 4-year FIG period can be transferred to the UK without a tax charge.
• The regime will apply equally to UK and non-UK nationals, so can now be used by UK nationals who move back to the UK having been absent for 10 or more years –
• Any overseas income and gains claimed as exempt under the FIG rules will still need to be reported on a UK tax return.
• Overseas assets will be within the scope of Inheritance Tax (IHT) where an individual has been a resident of the UK for at least 10 out of the previous 20 years before a chargeable event.

Overseas Workday Relief

Individuals that qualify for FIG can claim an exemption from UK tax in respect of earnings relating to non-UK workdays in the first four years of tax residency. Claims are limited to the lower of £300,000 or 30% of qualifying employment income per tax year.

There will be no requirement to keep earnings relating to overseas workdays outside of the UK or have salary paid to a qualifying overseas account, however trailing payments relating back to a period prior to 6 April 2025 (such as an annual bonus) will be caught by the previous rules and may still need to be paid and kept outside of the UK to be eligible for relief.

Temporary Repatriation Facility (TRF)

Individuals that have claimed non domicile status in a prior year can also benefit from a Temporary Repatriation Facility (or TRF) allowing remittance of overseas income and gains with a reduced tax rate for three years from the 2025/26 tax year.

This is a very attractive planning opportunity for those that had previously kept overseas income and gains offshore when claiming the remittance basis to now transfer this to the UK.

The TRF reduced tax rates will be 12% in 2025/26 and 2026/27, rising to 15% in the 2027/28 tax year.

Rebasing of assets for capital gains tax purposes

If you have claimed remittance basis as a non-UK domicile but will be over the 4-year time period from the 2025/26 tax year (and therefore ineligible for the new FIG regime), you will be able to rebase overseas assets back to their value on 5 April 2017 for capital gains tax purposes.