Case Studies
Entity Setup Case Study: Using FIG regime to Plan Trust Distributions
A case study exploring how a non-UK domiciled individual might plan trust distributions under the UK’s new tax regime to avoid adverse arising basis tax after FIG ends.
By NomadicTax Research Team • 5-8 min read • November 19, 2025
## Context and Client Profile
**Client:** Jordan, 45, non-UK domiciled, lived abroad for 12 years. Plans to move to UK on 25 May 2025.
**Assets:** Trusts located in different jurisdictions distributing varying income and gains.
**Objective:** Maximize tax efficiency pre- and post-FIG while avoiding pitfalls of the arising basis after FIG expires.
## Timeline of Key Regimes & Tax Rules
- **Before 6 April 2025:** Remittance basis applied. Foreign income/gains only taxed if remitted. Trust distributions may avoid UK tax if not remitted and trust non-resident. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
- **6 April 2025-2029:** Jordan enters FIG regime. First four tax years eligible: foreign income/gains taxable only when remitted; trust distributions may follow similar rules depending on settlor or beneficiary and type of trust. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
- **After FIG period:** If doesn’t qualify, abroad income and trust-income recognised on arising basis. Pre-2025 trust income/gains may have transitional treatment for remittances under Temporary Repatriation Facility. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
## Structuring Distributions & Remittances
### Before Moving:
- Delay large foreign gains or income realisation until after entering UK so as to benefit from FIG’s initial 4 years.
- For trust distributions, check **settlor / beneficiary tests**: if Jordan is settlor or related to one, different rules apply. Plan distributions accordingly.
### During FIG Period:
- Remit only the income/gains you need for living expenses in the UK; leave others offshore where possible.
- Use Temporary Repatriation Facility (for pre-6 April 2025 FIG gains) to bring money at reduced rate (12%) if eligible. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
- If trust distributions occur, classify correctly: settlor, beneficiary, and non-resident trust status matters.
### After FIG Expires:
- Flipping tax recognition to arising basis means foreign gains/income taxed as they are realised, not upon remittance. Avoid unintended trigger events.
- Consider moving income producing assets into entities or jurisdictions with favorable treaty status, or into UK domiciled trusts where transparency and compliance are straightforward.
## Example Calculation: Trust Distribution Timing
Suppose Jordan receives a foreign trust distribution of £100,000 in 2026 which includes £70,000 pre-2025 FIG gains and £30,000 arising after April 6, 2025:
- If he remits the entire £100,000 in 2026, applicable tax on the pre-2025 gains may be at **12% under the Temporary Repatriation Facility**.
- The post-2025 amount (£30,000) may be taxed fully as it arises, depending on whether Jordan qualifies for FIG.
- If not remitted, the FIG period shelter can work, but planning must align with residence and remittance patterns.
## Action Steps for Similar Cases
- Before moving jurisdiction, identify all trust arrangements, their resident / non-resident status, settlor/beneficiary chain, and current value.
- Keep detailed records of dates of income / gains realisation, remittances, and trust documents.
- Covenant with advisers to adjust structure if future regime shifts (e.g., if FIG eligibility is lost).
## Key Lessons Learned
- **Timing is everything.** When to realise gains, make distributions, or remit foreign income matters hugely.
- The dual regimes (FIG vs arising) mean planning must span both the next 4 years and what comes after.
- Trusts add complexity. Understand trust law, tax treaty law and HMRC rules especially post-FIG.
## Conclusion
Jordan’s case shows that with strategic timing and structure, it is still possible to get substantial tax benefits under the UK’s new non-dom regime. But once FIG expires, holding traps like undistributed trust income or withheld remittances can lead to heavy tax under the arising basis. For entity setup and distributions, professional advice—and rigorous documentation—are essential.