Tax Planning for Digital Nomads: Navigating the FIG Regime after Domicile Reforms

Overview of the New FIG Regime

• As of 6 April 2025, the UK removed the concept of domicile for tax purposes. It introduced a residence-based system that includes the new Foreign Income & Gains (FIG) regime. (assets.publishing.service.gov.uk)
• The UK also introduced a Temporary Repatriation Facility (TRF) allowing individuals previously taxed under the remittance basis to designate pre-6 April 2025 FIG amounts and pay a reduced tax rate over three years. (assets.publishing.service.gov.uk)

Pros & Challenges for Digital Nomads

Pros:

• FIG regime gives clearer rules for tax on foreign income and gains for UK residents regardless of where income arises.
• The TRF provides a transitional opportunity for individuals previously under the remittance basis system.

Challenges:

• International tax treaties still in force may interact with FIG in complex ways.
• Obligations to report FIG and pay tax on gains or income may catch some digital nomads unaware, especially if they have been used to relying on remittance basis or non-dom status.

Practical Planning Tips

• Establish your UK tax residence each tax year: SRT (Statutory Residence Test) remains the tool to do this. Count your days, ties, and broken years carefully. For example, “exceptional circumstances” can allow you to disregard up to 60 days in a year. (gov.uk)
• Use the TRF smartly: if you hold unrealised gains or income accrued before April 2025, planning the timing and rate of bringing them into the UK under the TRF might save tax.
• Keep offshore funds truly offshore if tax-efficient; under FIG, bringing money in (remittance) triggers UK tax unless reliefs apply.
• Monitor foreign property and trusts: anti-avoidance rules, especially for long-term UK residents, may bring more assets into UK IHT scope. (gov.uk)

Example Scenario

• Nomad: Chris has been moving each year between UK and Europe. At tax year 2025-26 Chris is deemed UK resident under the SRT. He held US LLC income under remittance basis before April 2025. Using TRF, he designates pre-April 2025 income and gains, spreads tax liabilities over three years, avoiding full tax all at once.

Key Takeaways

1. Even for nomads, residence matters far more than domicile from April 2025 onward.
2. The decisions you make now—especially about bringing in foreign gains or structuring trusts—have long-term implications.
3. Working with cross-border tax experts is vital to navigate FIG, TRF, IHT rules and ensure compliance while optimising tax.