What’s Changed and When
From 6 April 2025, the UK will abolish the remittance basis of taxation for non-UK domiciled individuals, replacing it with a residence-based system. Key features include:
- A 4-year Foreign Income & Gains (FIG) regime for those who were non-UK resident for at least 10 tax years before becoming resident. During the first four years of UK residence, FIG arising abroad will not be taxed even if brought into the UK. (gov.uk)
- Overseas Workday Relief (OWR) remains, simplified, and eligibility depends on opting into the new FIG regime. (gov.uk)
- Trust income/gains arising after 6 April 2025 will generally be taxed on an arising basis, no longer protected through overseas trust structures. (gov.uk)
Who Qualifies?
- You must have been non-UK resident for at least 10 prior UK tax years, then become UK tax resident on/after 6 April 2025. (gov.uk)
- Applies also to those already resident by that date, if they’d completed their 10-year non-resident period and had been UK resident <4 years since. (gov.uk)
Transitional Reliefs & Opportunities
- A Temporary Repatriation Facility (TRF) allows individuals to bring in pre-6 April 2025 foreign income & gains at a flat 12% rate during 2025-26 and 2026-27. Trusts are excluded. (gov.uk)
- For 2025-26 only, those moving from remittance basis to arising basis but not eligible for the FIG regime pay tax on 50% of foreign income, though gains are taxed fully. (gov.uk)
- Assets held personally at 5 April 2019 can be rebased to that date, reducing potential gains. (gov.uk)
Actionable Tax Planning Tips for Digital Nomads & Expats
| Goal | Strategy |
|---|---|
| Minimise UK tax on foreign income | If eligible, plan to arrive or formalise UK residency just before a tax year starts—for instance, just after 5 April—to get full benefit of the 4-year regime. |
| Use TRF wisely | Only bring in necessary pre-April 2025 income during the TRF window (2025-26 & 2026-27) at 12%, rather than paying higher tax rates later. |
| Consider the rebasing election | Holders of foreign assets from 2019 should choose to rebase those assets to avoid gains that accrued before the policy change. |
| Record overseas work carefully | Maintain timesheets, contracts, proof of physical presence outside the UK for OWR eligibility. |
Compliance & Documentation
- Declare your residency status and eligibility in your Self Assessment.
- Maintain records of previous non-UK residence period, overseas earnings, gains, remittances, trust distributions.
- Work with advisers experienced in foreign income reporting and trust law—mistakes may expose you to unexpected liabilities.
Example Case
Maria, previously non-UK resident for 15 years, becomes UK tax resident on 1 May 2025. She opts into the FIG regime. During her first four years, foreign dividends and capital gains she receives abroad are not taxable in the UK—even if remitted—unless tied to UK income. She uses the TRF in 2025-26 to bring in legacy investment income at 12%, then rebases a share portfolio held since 2018 to its 5 April 2019 value to reduce CGT later.
Bottom Line
The shift to a residence-based system levels the playing field—but with careful planning, non-UK domiciled individuals and digital nomads can make the most of transitional reliefs, FIG regime, rebasing, and overseas workday relief. Act early, document everything, and align arrivals or elections smartly.