UK Non-Dom Abolition & 4-Year FIG Regime Guide
From 6 April 2025, the UK abolished the centuries-old Non-Domicile regime and Remittance Basis of taxation. This guide explains the new 4-Year Foreign Income & Gains (FIG) exemption regime, the Temporary Repatriation Facility (TRF), and what this means for expats, new arrivals, and individuals who previously used the remittance basis.
Effective 6 April 2025, the concept of domicile for tax purposes is abolished from UK law. The Remittance Basis — which allowed non-domiciled individuals to pay UK tax only on income and gains they brought (remitted) to the UK — is replaced by a residence-based Foreign Income & Gains (FIG) regime. Individuals who previously used the remittance basis must review their tax position urgently.
Before vs After: What Changed on 6 April 2025
| Aspect | Old Non-Dom Regime (Pre 6 April 2025) | New Regime (From 6 April 2025) |
|---|---|---|
| Key Concept | Non-domicile status (based on country of permanent home/birth) | UK tax residence only (no domicile concept) |
| Tax on Foreign Income (Years 1-4) | Remittance basis available — only taxed if brought to UK | 4-Year FIG Regime — 100% exempt for first 4 UK tax years (can remit freely) |
| Tax on Foreign Income (Year 5+) | Remittance basis ongoing (with Remittance Basis Charge from £30,000/yr) | Worldwide income taxed on arising basis (standard UK rates) |
| Remittance Basis Charge (RBC) | Required after 7 years residency (£30,000–£60,000/yr) | Abolished — no longer exists |
| Inheritance Tax (IHT) | Excluded property trusts sheltered foreign assets from UK IHT | Residence-based IHT: foreign assets excluded only for first 10 years |
| Pre-2025 Remittances | Could be remitted at standard UK income tax / CGT rates | Temporary Repatriation Facility (TRF): 12% in 2025/26 & 2026/27; 15% in 2027/28 |
| Annual Personal Allowance | Lost if claiming remittance basis (non-residents sometimes exempt) | Lost if claiming FIG regime in a given tax year |
The 4-Year Foreign Income & Gains (FIG) Regime Explained
The FIG regime is designed to attract new global talent and international professionals to the UK by offering a defined 4-year tax honeymoon on foreign income and gains for qualifying individuals who recently arrived in the UK after a long period abroad.
✅ Eligibility Condition
You must not have been UK tax resident in any of the 10 consecutive tax years immediately before the tax year in which you first become UK resident. This means if you have been abroad for 10+ years and then arrive in the UK, you qualify.
💰 The Tax Benefit
0% UK tax on all foreign income (dividends, interest, property income, employment income from non-UK sources) and foreign capital gains arising in your first 4 UK tax years. No restriction on remitting these funds to the UK.
⚠️ The Trade-Off
In any year you claim the FIG regime, you lose your UK Personal Allowance (£12,570) and Annual CGT Exempt Amount (£3,000). This means UK-source income is taxed from £0. Careful calculation is needed to determine if claiming FIG is worthwhile.
🏛️ Year 5 Onwards
Once the 4-year FIG period ends, you are taxed on your worldwide income and gains on an arising basis under standard UK rates — income tax (up to 45%), CGT (up to 24%), and inheritance tax on worldwide assets.
Transitional Rule for Individuals Already in the UK Before 6 April 2025:
If you were already UK resident as of 6 April 2025 and had been resident for fewer than 4 years following a 10+ year absence from the UK, you may be eligible to use the FIG regime for the remainder of that 4-year window. For example, if you arrived in 2023/24 after 10 years abroad, you had a 2-year FIG period remaining from 6 April 2025.
Temporary Repatriation Facility (TRF)
For individuals who previously used the Remittance Basis and have pre-6 April 2025 foreign income and gains sitting in offshore accounts, the Temporary Repatriation Facility (TRF) provides a time-limited opportunity to bring those old funds to the UK at a significantly reduced UK tax rate instead of the full income tax / CGT rate.
| Tax Year | TRF Rate | Window |
|---|---|---|
| 2025/2026 | 12% | 6 April 2025 – 5 April 2026 |
| 2026/2027 | 12% | 6 April 2026 – 5 April 2027 |
| 2027/2028 | 15% | 6 April 2027 – 5 April 2028 |
| 2028/2029 onwards | Standard rates apply | TRF expires permanently |
Inheritance Tax (IHT) Changes — Residence-Based System
Previously, non-domiciled individuals could hold foreign assets in Excluded Property Trusts to shelter them from UK Inheritance Tax (40%). Under the new system, IHT is also moving to a residence-based framework:
Foreign assets NOT subject to UK IHT (excluded from UK estate)
Worldwide assets (including foreign) ARE subject to UK IHT at 40%
IHT "tail" — if UK resident for 10+ years, worldwide estate remains in scope for up to 10 years after departure
Existing Excluded Property Trusts reviewed — complex transitional rules apply based on settlor's residence
- • GOV.UK Non-UK Domicile Taxation Changes (Official Policy): gov.uk/changes-to-non-uk-domicile-taxation
- • HMRC INTM Guidance on FIG Regime: gov.uk/hmrc-internal-manuals/intm161010
- • Finance Act 2025 — Non-Dom Provisions: legislation.gov.uk/ukpga/2025/17
- • HMRC SA109 (Residence, Remittance Basis etc. Form): gov.uk/sa109-residence-form
- • ACCA Technical Guidance — Non-Dom Reform: accaglobal.com
⚠️ Non-Dom reform is highly complex with significant individual variation. Trust structures, offshore portfolios, and IHT planning require specialist UK tax advice. This page is for educational purposes only.