Digital Nomad

How the New “FIG” Regime Transforms Tax Planning for Former Non-Domiciled Individuals

With the UK non-dom regime being replaced by a residence-based Foreign Income & Gains (FIG) regime from 6 April 2025, individuals with international income need to understand eligibility, transitional reliefs, and how to align their planning accordingly.

By NomadicTax Research Team • 5-7 min read • April 8, 2026

## What’s Changed The UK government has **abolished the remittance basis** for non-UK domiciled individuals, replacing it with a residence-based approach known as the Foreign Income & Gains (FIG) regime effective **6 April 2025**. ([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai)) Under this change, domicile no longer determines income tax and capital gains tax treatment—instead, whether someone qualifies depends on their residence history. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) ## Who Qualifies for the FIG Regime To benefit from the FIG regime you must: - Be UK tax resident after having **10 consecutive UK tax years of non-residence** immediately before your arrival. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) - Elect to use the FIG regime for the **first four tax years** of residence. During those years, eligible foreign income and gains are exempt from UK tax, whether remitted or not. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) Those not meeting eligibility—e.g. returning too soon or having been UK resident recently—will be taxed normally on worldwide income and gains. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) ## Transitional Provisions You Must Know There are several temporary reliefs and special mechanisms designed to ease the transition: - **Temporary Repatriation Facility (TRF):** Pre-6 April 2025 FIG brought into the UK or designated may be taxed at a **reduced rate (12% in 2025-26 & 2026-27; rises to 15% in 2027-28)**. ([taxscape.deloitte.com](https://taxscape.deloitte.com/measures-autumn-budget-2024/reform-of-taxation-of-non-domiciled-taxpayers.aspx?utm_source=openai)) - **Rebasing of assets:** For individuals who have claimed remittance basis and satisfy certain conditions, non-UK sited assets may be automatically rebased for disposals on or after 6 April 2025. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) - **Overseas Workday Relief (OWR):** Retained but simplified; eligibility extended from 3 to 4 years and subject to financial limits, with decisions to opt into FIG or stay under standard system. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) ## Actionable Tax Planning Tips Here are strategies to align with the new environment: - **Evaluate residence history now.** If you’re non-resident for 10 years or more, check whether you will qualify to elect into the FIG regime when you next become UK resident. - **Consider bringing forward asset disposals or income recognition** before 6 April 2025, especially where pre-2025 FIG is involved, to avoid unfavourable tax or lose eligibility for TRF or rebasing. - **Review offshore trusts and settlements.** Protected trust regimes are being removed if you’re not eligible. Settlements made before 6 April 2025 under older rules may still have exclusion properties, but after that date protection is limited. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai)) - **Monitor remittance decisions carefully.** Under the TRF you might elect to designate and bring in funds at a reduced rate—timing and categorisation of remitted vs designated funds matter. - **Plan for the fourth year when exemption ends.** Once the initial FIG period ends, expect full taxation on worldwide income and gains. Have mitigation strategies ready: treaty reliefs, splitting income, timing of gains. ## Example Scenario Emily, a UK citizen who has lived overseas for 11 years, moves back on 1 May 2025. Because she was non-UK resident for 10 full tax years, Emily elects into the FIG regime. Her first FIG year is 2025-26. Suppose she has foreign rental income of £50,000 and capital gains of £20,000 abroad. Under FIG, **none of this is taxed in the UK**, regardless of whether she brings it into the UK. She also avoids giving up allowances. Once she reaches her fifth year of UK residence (2029-30), worldwide income and gains become taxable in full. ## Key Risks and Pitfalls - Misunderstanding eligibility periods, especially if you had split years. - Forgetting to elect FIG regime in year of arrival. It’s not automatic. - Failing to track assets or funds defined as pre-April 2025 when applying TRF or rebasing. - Trusts set up post-April 2025 may no longer have protected status. ## Summary The post-April 2025 UK FIG regime represents a major shift: planning based on **residence**, not domicile. If you have significant foreign income, assets, or use offshore trusts, now is the time to evaluate eligibility, make necessary elections and prepare for full worldwide taxation once the four-year exemption ends. **Note:** Legislation is still subject to parliamentary approval and HMRC guidance. Always double-check with current law and a professional adviser.