What has changed?
From 6 April 2025, the UK removed the longstanding remittance basis for non-UK domiciled (non-dom) individuals, replacing it with a 4-year Foreign Income & Gains (FIG) regime. Under this regime, individuals who became UK tax resident after being non-resident for 10 preceding tax years are eligible to claim 100% relief on newly arising foreign income and gains (FIG) during their first four years of UK tax residence—regardless of whether they remit them to the UK. (assets.publishing.service.gov.uk)
Overseas Workday Relief (OWR)—which provides relief on earnings from duties performed outside the UK—will still be available, but eligibility will largely hinge on qualifying under the new 4-year FIG regime. (assets.publishing.service.gov.uk)
Other changes include:
- Trusts: FIG arising in settlor-interested trusts will lose protection if the settlor or beneficiaries do not qualify for the FIG regime. Distributions matched to UK resident beneficiaries who are outside the FIG regime will be taxed accordingly. (assets.publishing.service.gov.uk)
- Temporary Repatriation Facility (TRF): Former users of the remittance basis can elect to designate previously untaxed FIG (from before 6 April 2025) over a 3-tax-year period under which those amounts are taxed at an eased rate (12% in 2025-26 and 2026-27, rising to 15% in 2027-28). (assets.publishing.service.gov.uk)
Who is affected?
- Individuals who become UK tax residents from 6 April 2025 onwards and meet the prior-non-residence test (10 years of non-UK residence).
- Non-doms who previously relied on the remittance basis but do not qualify under the FIG rules.
- Foreign-based firms paying UK employees working partially abroad may need to adjust pay systems in light of OWR eligibility tied to one’s status under FIG.
Practical examples
| Scenario | FIG regime eligible? | Tax on foreign income or gains not remitted? | OWR on overseas duties? |
|---|---|---|---|
| Alice moves to UK in May 2025 after 12 years abroad | Yes | No tax on FIG for first four years, retained whether remitted or not | Eligible for OWR on duties abroad during this period |
| Omar has been resident in UK before 2025, used remittance basis | No | All newly arising foreign income/gains taxed like UK residents | Cannot rely on OWR on newly arising income unless meets FIG eligibility |
| Selina receives income from trust where she’s beneficiary, not under FIG | No | Distributions taxed if settled or matched to UK resident beneficiaries | Not covered under OWR for those distributions |
What should digital nomads do?
- Assess your non-residence history: have you had at least 10 years of non-UK tax residence before coming? If yes, FIG might apply.
- Track duties location: document days worked abroad vs UK to benefit from OWR.
- Consider TRF for transition: if you were using remittance basis before, the TRF may help bring old FIG under more favourable rates.
Actionable insights
- Get clarity early: discuss with a UK tax advisor to model your tax due under FIG vs old rules.
- Maintain evidence: logs, contracts, proof of non-residence. Crucial for claims under FIG or OWR.
- Plan repatriation: if using the TRF, decide which amounts to designate and spread across years for lower taxation.
Bottom line: For nomads, non-doms, or globally mobile individuals, these reforms shrink previous loopholes but introduce more certainty—if you qualify. Early planning matters.