What’s Changed for Non-UK Domiciled Individuals
From 6 April 2025, UK tax law shifts from domicile-based rules to a residence-based Foreign Income & Gains (FIG) regime, so new arrivals and former non-UK residents are affected. The remittance basis is abolished. (gov.uk)
Who Qualifies for the 4-Year FIG Regime
You’ll need to meet all of these:
- Be tax resident in the UK as of now (or arriving) after a period of 10 consecutive years non-UK residence. (gov.uk)
- Make the UK your tax base for income, meaning most of your foreign income & gains are eligible for relief.
- Opt into the FIG regime (you must make a claim for each tax year you want to be covered). (gov.uk)
Benefits & Constraints: The Rules You Should Know
Benefits:
- FIG regime gives tax exemption on foreign income & capital gains for first four tax years after establishing UK residence (following the 10-year non-residence period). (gov.uk)
- Easier administration: removal of remittance tracking and fewer complications with trusts. (gov.uk)
Constraints:
- If you don’t qualify, you’ll be taxed on worldwide income & gains as they arise, no relief. (gov.uk)
- Overseas Workday Relief (OWR), if eligible, lasts for first 3 years of UK residence (for those under FIG). For those not eligible, it may not apply. (gov.uk)
- A Temporary Repatriation Facility (TRF) offers reduced tax (12% for 2025-26 / 2026-27) on remittances of foreign income & gains arising under the old regimes—but only for certain cases. (gov.uk)
Practical Scenarios for Digital Nomads
| Scenario | Qualifies for FIG? | Tax Implications | Tips to Position Yourself Well |
|---|---|---|---|
| Moving to the UK in 2025 after 10 years abroad with foreign investments | Yes | Foreign income & gains for first 4 years exempt; you’ll pay UK income tax on UK-source income; trusts/shares abroad taxed less strictly | Keep foreign assets outside trust structures; prepare claims early; track UK arrival date closely |
| Already UK resident under old regime but used remittance basis | Partially | Pre-6 April 2025 remittances taxed under old regime; new FIG governs post-6 April income/gains; TRF may reduce the rate on certain remitted pre-change income | Calculate cost of remaining under old rules; consult with tax advisors to evaluate TRF eligibility |
| Remote worker splitting time UK / abroad | Depends on residence status | Taxation depends on how many days in UK; where income is earned; use of OWR if eligible | Maintain strong records of where duties performed; plan to maximize reliefs in early years |
Action Steps to Stay Compliant & Optimise
- Establish and document your UK residence date and non-UK residence history. Every day matters toward qualifying.
- Decide early whether you’ll claim FIG, setting out whether you meet the 10-year non-residence condition.
- Assess your foreign income & gains, and whether to repatriate them under TRF at 12% (if eligible) before rates change.
- Review your use of trusts: under the new rules, previous protections for settlor / trusts will be curtailed. (gov.uk)
- Track overseas workdays: to qualify for OWR you’ll need clear proof of days worked outside UK.
- Consult tax advisors, especially if moving before or around 6 April 2025—transitional reliefs and exemptions could be critical.
Final Thoughts
The reformed FIG regime simplifies taxation for mobile individuals and eliminates domicile-based complexities. But the qualifying criteria, timing, and structure of income/assets will determine how favorable it is. For digital nomads, early preparation around residence status and foreign income is key to making the most of these changes.