What the FIG regime actually does
From 6 April 2025, UK residents are generally taxed on worldwide income and gains as they arise. The former remittance-basis system was replaced by a residence-based regime. A qualifying new resident can claim relief for selected eligible foreign income, selected eligible foreign gains, or both.
Relieved amounts can be brought to the UK without an additional remittance charge. The regime is therefore not an instruction to keep money offshore. It is a claim-based exemption for qualifying amounts arising during a limited window.
The ten-year test
For the first qualifying year, you must be UK resident under the Statutory Residence Test and must not have been UK resident in any of the ten consecutive tax years immediately before it. Nationality and domicile do not decide the test. A British citizen who previously lived in the UK can qualify after a sufficiently long period of non-residence.
| Question | Why it matters |
|---|---|
| Were you non-UK resident for ten full consecutive tax years? | A calendar decade abroad is not necessarily ten qualifying tax years. |
| Were any departure or overseas years UK-resident under the SRT? | One resident tax year can break the required run of non-residence. |
| Did split-year treatment apply when you left? | That tax year still counts as a UK-resident year for the FIG eligibility test. |
| Were you treaty-resident elsewhere while UK-resident under the SRT? | Treaty residence does not turn the year into a non-resident year for this test. |
This is why “I left the UK ten years ago” is not enough. The residence result must be mapped tax year by tax year. Someone who left part-way through 2016/17 and remained UK resident for that year may need to delay a return beyond the date suggested by a simple anniversary calculation.
Does a split arrival year use one of the four years?
Yes. The first UK-resident tax year starts the four-year window, even if split-year treatment means only the later part of that year is taxed as the UK part. The window is the first qualifying year and the three tax years immediately following it.
| Year | Status | FIG position |
|---|---|---|
| 2026/27 | Return in January 2027; UK resident with split-year treatment | Year 1. A shortened UK part still starts the four-year window. |
| 2027/28 | UK resident | Year 2. Claim if beneficial. |
| 2028/29 | UK resident | Year 3. Claim if beneficial. |
| 2029/30 | UK resident | Year 4. Final available year. |
| 2030/31 | UK resident | No FIG claim, even if an earlier year was not used. |
If you become non-UK resident during the window, you cannot claim for that non-resident year. You may claim in a later qualifying year still inside the original four-year period, but the missed year does not roll forward.
Which income and gains can qualify?
Common qualifying foreign income includes interest from a foreign bank account, dividends from non-UK companies, profits from an overseas property business, foreign pension income other than excluded categories, and profits of a trade carried on wholly outside the UK. Qualifying foreign gains can include gains on non-UK assets, subject to the detailed statutory rules.
| Potentially within FIG relief | Not automatically covered |
|---|---|
| Foreign bank interest and overseas-company dividends | UK salary, UK rent and gains on UK assets |
| Eligible overseas property-business profit | Foreign employment earnings; separate Overseas Workday Relief rules may apply |
| Eligible foreign pension income | Certain disqualified pension income and other statutory exclusions |
| Qualifying gains on non-UK assets | A gain is not foreign merely because the platform or bank account is offshore |
| Some eligible trust or anti-avoidance amounts | Pre-6 April 2025 amounts simply because they remain offshore |
Employment income needs particular care. Foreign earnings and foreign specific employment income are not relieved by the ordinary foreign-income claim, although a qualifying employee may be able to use Overseas Workday Relief for eligible overseas duties.
A foreign account does not make every gain foreign
The location of a broker or platform is not the classification test. The underlying asset, the legal fund or company and the relevant tax rules determine whether income or a gain is foreign. A Dubai-based account can contain UK shares, UK funds, offshore funds, foreign bonds and cash deposits, each with a different answer.
The calculation also remains a sterling calculation. FIG relief may remove the UK tax on a qualifying foreign gain that is properly claimed, but it does not create a rebasing of the asset or rewrite its acquisition history.
The claim is annual and source-by-source
FIG relief is not automatic. A claim must be made through Self Assessment for each tax year in which it is wanted. The relevant foreign income and gains must be declared and the amount of relief quantified.
- You can claim for foreign income, foreign gains, or both.
- You can select particular sources or gains rather than claiming everything.
- A claim in year one does not automatically continue into years two, three and four.
- There is no general financial cap on the amount of qualifying FIG relief.
- Relief cannot be claimed on amounts that are not identified and quantified in the return.
That flexibility is commercially useful. A returner with modest foreign interest but a large UK income may decide that losing allowances is poor value in one year, while a later year containing a substantial overseas dividend or disposal may justify a claim.
What do I give up if I claim?
A foreign-income claim, foreign-gain claim or Overseas Workday Relief election removes several allowances for that tax year. The cost applies even if the claim covers only one source or only a relatively small amount.
| Potential cost | Practical effect |
|---|---|
| Personal Allowance | UK income may become taxable from the first pound, subject to other rules and allowances. |
| CGT annual exempt amount | UK and other taxable gains lose that year’s annual exemption. |
| Certain family and personal allowances | Marriage-related, blind person and specified life-insurance reliefs can be lost. |
| Foreign losses arising in the claim year | Qualifying foreign capital, trading and property losses can cease to be usable. |
| Foreign Tax Credit Relief on relieved income | The same income cannot receive both FIG relief and foreign tax credit relief. |
| Some pension-contribution tax relief | A foreign-income claim can affect the earnings figure supporting relief. |
A simple annual decision example
Assume a qualifying returner has £9,000 of foreign bank interest, £60,000 of UK employment income and no foreign gains. A FIG claim could relieve the foreign interest, but it would also remove the Personal Allowance and CGT annual exempt amount for that year.
The correct answer is not visible from the £9,000 alone. The taxpayer must compare the Income Tax saved on the interest against the extra tax on UK income caused by losing the Personal Allowance, while also considering any taxable gains, family charges, pension contributions and foreign losses. If a later year contains a £250,000 qualifying foreign dividend, the cost-benefit balance may be entirely different.
This is an illustration, not a tax calculation. Rates, bands, allowances and the individual’s wider position must be modelled for the relevant year.
Can I bring the relieved money into the UK?
Yes. Qualifying income and gains relieved under the FIG regime can be remitted to the UK without a further UK tax charge. That is a major difference from the old remittance basis.
But do not mix this up with historic funds. Foreign income and gains from earlier periods—particularly pre-6 April 2025 amounts connected with former remittance-basis use—may have their own rules. The Temporary Repatriation Facility is a separate transitional regime and is not the same as FIG relief.
What should I do before returning?
| Action | Output |
|---|---|
| Rebuild the residence timeline | Record the SRT result for every tax year, including the departure year and any split years. |
| Fix the likely return year | A small change in timing may decide whether ten consecutive non-resident years exist. |
| Inventory foreign sources | List interest, dividends, rent, pension income, trusts, businesses and intended disposals. |
| Classify the underlying assets | Do not rely on the platform location or marketing description. |
| Forecast four tax years | Identify lumpy dividends, vesting, property sales, portfolio disposals and pension payments. |
| Model claim versus no claim | Include allowances, losses, pension relief, child-benefit or childcare consequences and foreign tax credits. |
| Create the tax evidence file | Retain statements, acquisition history, valuations, FX records and source-by-source calculations. |
The planning point
The four-year FIG regime can be a powerful transition window for a long-term expatriate returning to the UK. It can also be wasted through a mistimed return, an unexamined split year or an uneconomic claim.
Start with the life decision and the return date. Then map the ten-year residence history, give each overseas asset and income source a job, and model each claim year separately. The objective is not to chase a relief. It is to use the relief deliberately where it supports the wider plan.
