UK Foreign Income & Gains (FIG) Regime Guide 2026
Practical 2026 guide to the UK Foreign Income and Gains regime: eligibility after 10 consecutive tax years of non-UK residence, four-year relief for qualifying foreign income and gains, remittance treatment, TRF transitional rules, Overseas Workday Relief and residence-based Inheritance Tax.
FIG Regime 2026: What Changed on 6 April 2025
From 6 April 2025, the UK no longer allows UK residents to use the former remittance basis of assessment. Instead, the new Foreign Income and Gains (FIG) regime provides relief for qualifying new UK residents who have been non-UK resident for at least 10 consecutive tax years. The regime can relieve qualifying foreign income and gains arising during the first four tax years of UK residence. It is a relief regime with specific eligibility, claim and allowance consequences, rather than a universal four-year tax exemption for every overseas receipt.
FIG Eligibility: The 10-Year Non-Residence Condition
The central eligibility test is residence history. A person must be a UK tax resident and be within their first four years of UK residence following at least 10 consecutive tax years of non-UK residence. The relevant history is based on tax years, not a simple count of calendar days spent abroad. FIG therefore primarily targets individuals who have been outside UK tax residence for a long period before returning to the UK.
| Requirement | 2026 Position |
|---|---|
| UK residence | Must be UK resident under the Statutory Residence Test. |
| Prior residence history | At least 10 consecutive tax years of non-UK residence immediately before the relevant UK residence period. |
| FIG window | First 4 tax years of UK residence following the qualifying period. |
| Claim | Made for each relevant tax year; relief is not automatic. |
| Residence outside UK for only 8 years | Does not satisfy the 10-year condition. |
| Residence outside UK for 10+ consecutive years | Potentially eligible, subject to all other FIG conditions. |
What FIG Relief Actually Covers
FIG relief applies to qualifying foreign income and gains arising during a qualifying year. The individual identifies the relevant foreign income and gains and claims relief for the chosen amounts. The regime can apply to foreign investment income, foreign property income, qualifying foreign employment income and qualifying foreign gains, subject to the detailed category rules. It does not turn UK-source income or gains into exempt amounts.
FIG and Remitting Foreign Income or Gains to the UK
A major difference from the old remittance basis is that a qualifying individual who claims FIG relief is not taxed merely because the qualifying relieved foreign income or gains are subsequently brought to the UK. The relief applies to the qualifying foreign income and gains themselves. This should not, however, be confused with historical pre-6 April 2025 foreign income and gains that arose while the person was taxed under the old remittance basis. Those historical amounts remain governed by their transitional rules and may be relevant to the TRF.
| Amount | General 2026 Treatment |
|---|---|
| Qualifying foreign income/gains arising from 6 April 2025 and relieved under FIG | Can be remitted to the UK without UK tax arising merely because of the remittance. |
| Pre-6 April 2025 foreign income/gains previously subject to remittance basis | Remain subject to transitional remittance rules; FIG does not simply erase the historical remittance charge. |
| Pre-6 April 2025 amounts designated under TRF | Can receive the applicable reduced TRF tax treatment. |
| Ordinary capital genuinely accumulated before UK residence | Transfer itself is not automatically taxable income; its history/source must nevertheless be established. |
FIG Claims Have Significant Allowance and Loss Consequences
A FIG claim is not simply a free tax election. HMRC's 2026 guidance states that a claimant loses the Personal Allowance and the CGT annual exempt amount, together with certain other allowances and tax reductions. The claimant also cannot generally claim specified foreign income or capital losses in a year in which FIG relief is claimed. These consequences need to be included in any comparison between claiming FIG and paying UK tax on an arising basis.
FIG Is Not the Same as Overseas Workday Relief
Qualifying new residents with foreign employment income can also need to consider Overseas Workday Relief (OWR). OWR is a separate relief with separate conditions and a financial limit. The fact that an employment payment is foreign does not automatically mean it is fully relieved under FIG, and FIG and OWR should be analysed together when a new UK resident continues or begins internationally mobile employment.
Temporary Repatriation Facility (TRF): Who Can Use It?
The Temporary Repatriation Facility (TRF) is aimed at individuals who previously claimed the remittance basis and still have qualifying pre-6 April 2025 foreign income and gains. It is not the general mechanism for new foreign income arising after 6 April 2025. Eligible former remittance-basis users can designate qualifying historical foreign income and gains and benefit from a reduced tax rate during the three-year facility.
| Tax Year | TRF Rate |
|---|---|
| 2025-26 | 12% |
| 2026-27 | 12% |
| 2027-28 | 15% |
TRF Designation Does Not Require Immediate Remittance
The TRF is often misunderstood as a temporary window in which designated money must physically be brought to the UK. HMRC's 2026 HS264 guidance says a taxpayer does not have to remit the designated amount during the TRF period in order to benefit from the reduced tax rate, although the amount can be remitted. The designation election is made through the Residence and FIG pages of SA109.
Legacy Remittance Basis vs FIG: Correct Comparison
The former remittance basis should not be described as simply a 15-year tax-free system with a £30,000/£60,000 fee. The old regime was a choice-based system for eligible non-domiciled taxpayers with different consequences depending on residence history and remittance-basis claims. From 6 April 2025 it has been replaced for current UK residents by the arising basis plus the new FIG regime for qualifying new residents.
| Feature | Former Remittance Basis | FIG Regime from 6 April 2025 |
|---|---|---|
| Gateway | Former domicile/remittance-basis eligibility rules | 10 consecutive tax years of prior non-UK residence plus current UK residence |
| Core mechanism | Foreign income/gains could be kept outside UK tax until remitted, subject to the applicable rules | Qualifying foreign income/gains can be relieved during the first 4 UK-residence years |
| Remittance | Historical remittance could create UK tax | Qualifying FIG-relieved amounts can be brought to UK without an extra UK tax charge merely on remittance |
| Allowance consequences | Remittance-basis claims could lose various allowances | FIG claim also loses Personal Allowance and CGT annual exempt amount |
| After FIG window | Legacy rules no longer apply to current years | Ordinary arising-basis taxation generally applies to worldwide income and gains |
Year 5 and the End of FIG Relief
The FIG relief window lasts for the qualifying individual's first four tax years of UK residence following the required 10 consecutive years of prior non-residence. Once the four-year period ends, the FIG relief is no longer available. The individual is then generally taxed under the ordinary arising basis on worldwide income and gains, subject to any other reliefs or special regimes that may apply to their circumstances.
Residence-Based Inheritance Tax from 6 April 2025
From 6 April 2025, the UK moved from the old domicile-based framework for Inheritance Tax on foreign assets to a residence-based long-term UK residence test. An individual is generally a long-term UK resident if they have been UK resident for at least 10 of the previous 20 tax years immediately before the relevant chargeable event. Long-term UK residents can have worldwide assets within IHT, while the position for non-long-term UK residents depends on the relevant asset and the statutory situs rules.
IHT Residence Tail After Leaving the UK
The residence-based IHT regime does not necessarily stop applying immediately when a long-term UK resident leaves the country. A former long-term UK resident can remain within the worldwide-assets IHT regime for a tail period, generally between 3 and 10 tax years depending on the individual's prior UK residence history. HMRC gives examples where 10 to 13 UK-resident years can result in a 3-year tail, while longer histories can produce longer tail periods.
| Prior UK Residence History | Indicative Minimum Tail |
|---|---|
| 10 to 13 UK-resident years | 3 years after leaving |
| 14 UK-resident years | 4 years after leaving |
| 15 UK-resident years | 5 years after leaving |
| 16 to 19 UK-resident years | Longer tail under the statutory scale |
| 20 UK-resident years | Up to 10 years after leaving |
FIG, Temporary Non-Residence and Returning to the UK
A person who leaves the UK and later returns can encounter both FIG and temporary-non-residence rules. Temporary non-residence can bring certain gains and income received while away back into UK tax on return. Separately, a returning individual can potentially qualify for FIG if the person has completed the required 10 consecutive tax years of non-UK residence. HMRC's 2026 guidance specifically addresses the interaction between temporary non-residence and FIG.
Practical 2026 FIG Decision Workflow
A reliable FIG analysis should begin with the UK residence history, not domicile. Establish whether the individual is UK resident, count the consecutive prior tax years of non-residence, identify the current FIG year, list the foreign income and gains, test eligibility for each item, quantify the lost allowances and losses, and then decide whether to claim FIG. Former remittance-basis users must separately test whether historical amounts fall within the TRF.