Tax Planning
Non-UK Domiciled Individuals: Understanding the New Foreign Income & Gains Regime
UK non-domiciled tax rules have changed: the remittance basis is abolished, replaced by a 4-year regime that grants tax reliefs for foreign income & gains beginning 6 April 2025.
By NomadicTax Research Team • 5-8 min read • April 11, 2026
## Background: What Was the Remittance Basis?
Under the old system, non-UK domiciled individuals who were UK resident could **choose the remittance basis**, meaning they only paid UK tax on foreign income and gains if they were brought (“remitted”) into the UK. This system has now been abolished. ([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))
## What Has Changed: Foreign Income & Gains (FIG) Regime
From **6 April 2025**, a **4-year foreign income and gains (FIG)** regime replaces the remittance basis for individuals moving to UK tax residence after 10 years of non-UK residence. ([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)) Key features:
- If you’ve been non-UK resident for the last 10 tax years, **upon becoming UK tax resident**, your foreign income and gains earned while overseas are exempt **for your first four tax years** of UK residence. ([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))
- During those four years you may **bring those amounts into the UK** without additional charges. Trust distributions from non-resident trusts also shielded during that period. ([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))
## Changes to Overseas Workday Relief (OWR)
OWR is being simplified and maintained for first 3 tax years of UK residence—but only for those who opt into the FIG regime. Those eligible should understand how residence is counted and how electing affects overall tax status. ([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))
## Temporary Repatriation Facility (TRF)
For foreign income (not gains) generated before 6 April 2025, there’s a temporary facility: those who used remittance basis will **pay reduced tax (12%) on those amounts** under TRF during the fiscal years 2025-26 and 2026-27. ([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 that, all worldwide income and gains are taxed on the arising basis.
## Implications for Inheritance Tax (IHT)
The domicile-based IHT system is intended to shift to a residence-based regime effective from **6 April 2025**, subject to consultation. Currently, assets’ treatment under IHT depends on domicile or deemed domicile status. Trusts settled on or after that date will face new rules based on residence or tail provisions. ([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))
## Practical Advice & Examples
**Scenario: Emma moves to UK after 15 years abroad**
- Emma becomes UK tax resident for 2025-26.
- She qualifies for the new FIG regime if she had 10 years non-UK residence. Her foreign income & capital gains earned abroad before residency are exempt during her first four years in the UK.
- Trust incomes and distributions also lightly affected depending on trust setup.
**Scenario: George established a trust after 6 April 2025**
- Foreign income and gains arising within that trust will generally be taxed immediately to the settlor or deemed person, per the arising basis. The old protection dissolves.
## Actionable Steps
- Determine whether you qualify for the FIG regime. Check past residence years and non-UK presence.
- Consider electing into the regime as early as possible if you’re moving to UK residence soon.
- Review trust arrangements: trusts with distributions or settlors must be assessed under new rules.
- For inheritance planning, watch outcome of consultations for residence-based IHT and adjust estate planning accordingly.
## Summary
From 6 April 2025, non-domicile status has less flexibility. The new FIG regime offers temporary relief for foreign income and gains, removing remittance basis options. For those nearing or entering UK residence, it’s vital to assess your position early and adjust your tax and estate planning to avoid unexpected liabilities.