🇬🇧UK Non-Dom Reform 2025: FIG Regime, TRF and Your Options

The remittance basis ended on 6 April 2025. If you were planning around it — or paid the £30k/£60k annual charge for it — the rules have changed entirely. This page explains what the Finance Act 2025 actually did, what the new 4-year FIG regime offers, how the Temporary Repatriation Facility (TRF) lets you bring offshore funds onshore at 12% or 15%, and what UK residents are doing in response. It is written for people deciding whether to stay, restructure, or leave.

Why this matters now

The Finance Act 2025 (Royal Assent 20 March 2025) abolished domicile as a connecting factor for UK personal tax. From 6 April 2025, all UK residents are taxed on the arising basis on worldwide income and gains, regardless of where they were born or their parents' background. The remittance basis is gone. Deemed domicile is gone. Excluded property trusts lost their permanent shield. A new residence-based long-term residence (LTR) test replaced domicile for inheritance tax.

HMRC counted 73,700 non-doms on Self Assessment for the tax year ending 2024, with around 9,300 deemed-domiciled — about 83,000 individuals contributing £12.4bn in income tax, capital gains tax and National Insurance in 2023/24. The Office for Budget Responsibility's central estimate assumed roughly 1,200 emigrations following the reform, but independent modelling from CW Economics (October 2025) suggested the real number was closer to 1,800 within the first year. Either way, this is the largest reshaping of UK personal tax for inbound wealth since the 19th century.

At a glance

The reform in one paragraph

If you live in the UK now and you have never claimed the remittance basis, practically nothing changes for you — you were already taxed on worldwide income. If you did claim the remittance basis, your foreign income and gains from 6 April 2025 onwards are now taxed when they arise, not when they are brought to the UK. Your pre-April-2025 unremitted offshore income and gains can be designated and brought home at a flat 12% in 2025/26 or 2026/27 (15% in 2027/28) under the Temporary Repatriation Facility. If you are arriving in the UK and have been non-resident for the previous 10 tax years, you get four years of full exemption on foreign income and gains under the FIG regime. After that, you are taxed like everyone else.

The 4-year FIG regime

The Foreign Income and Gains (FIG) regime applies to qualifying new residents: individuals who are UK tax resident now and who were non-UK resident throughout the 10 consecutive tax years before the year they become UK resident. It does not matter whether you were ever UK resident before — only the 10-year gap counts.

The benefit runs for 4 consecutive UK tax years beginning with the year of arrival. Inside that window, qualifying individuals can claim full exemption on:

• foreign dividends, interest, royalties, foreign partnership profits, foreign rental income, foreign pension income, offshore income gains, and
• foreign chargeable gains.

Foreign employment income gets its own treatment through Overseas Workday Relief 2.0 (OWR), capped at the lower of £300,000 or 30% of total employment income per tax year inside the FIG window.

A claim is made annually on the Self Assessment return through supplementary pages SA109 (Residence, remittance basis etc), with helpsheet HS266 setting out the calculations. You may claim for foreign income, foreign gains, or both, in any given year. Claiming forfeits your personal allowance and capital gains annual exempt amount for that year — which is rarely material at the level of income FIG is designed for, but worth modelling at the margin.

After four years, you transition to the arising basis on worldwide income and gains as any other UK resident. The clock runs continuously: if you cease UK residence inside the four-year window, those years are still spent.

Temporary Repatriation Facility (TRF)

For former remittance-basis users, the TRF is the meaningful concession in this reform. It lets you designate pre-6-April-2025 offshore foreign income and gains and pay a flat charge that closes the position:

• 2025/26: 12%
• 2026/27: 12%
• 2027/28: 15%

There is no cap on the amount that can be designated, and once you have paid the charge you can remit the funds to the UK without further income tax or CGT. Designation also covers certain pre-2025 amounts in offshore trusts attributable to the settlor.

A few things to watch:

1. The TRF is a window, not a permanent feature. After 5 April 2028 the facility closes and pre-April-2025 unremitted FIG falls back to ordinary remittance rules with no preferential rate.
2. You can be UK resident or non-resident in the TRF year and still designate — you do not need to remain in the UK.
3. The TRF is compatible with the FIG regime — if you have a brand new 4-year FIG window and a legacy stack of offshore funds from before April 2025, you can use both.
4. Designated amounts must be identifiable in the offshore source. HMRC's RDRM71000 guidance sets out the ordering and identification rules.

CGT rebasing to 5 April 2017

A separate transitional relief lets former non-doms elect to rebase the cost of foreign-situs assets held personally to their value on 5 April 2017. This shelters historic gains that built up while you were claiming the remittance basis.

Eligibility is narrower than the TRF:

• you claimed the remittance basis in at least one tax year between 2017/18 and 2024/25;
• you were never UK-domiciled or deemed-domiciled before 6 April 2025;
• the election is made asset-by-asset.

If you have a portfolio of long-held foreign assets — pre-IPO equity, private fund interests, real estate — the rebasing election can be worth more than the TRF in absolute terms. Modelling required.

The new IHT long-term residence (LTR) test

Inheritance tax used to follow domicile. From 6 April 2025 it follows residence. You are a long-term resident — and so within IHT on worldwide assets — once you have been UK resident in at least 10 of the previous 20 tax years.

Once you become an LTR, the status carries an "IHT tail" after departure: between 3 and 10 further years of worldwide IHT exposure, scaling with how long you were resident. Ten consecutive non-resident tax years resets the clock.

Two practical points:

• Transitional rule. If you were non-UK resident in 2025/26 and were not UK-domiciled on 30 October 2024, you keep pre-6-April-2025 IHT treatment until you next become UK resident — at which point LTR applies.
• Excluded property trusts (EPTs). EPTs settled by a non-dom previously gave permanent shelter for non-UK assets from UK IHT. From 6 April 2025, non-UK assets in such trusts become relevant property during periods the settlor is an LTR, with up to 6% ten-year anniversary and exit charges (pro-rated). A £5m cap on relevant-property IHT charges per 10-year cycle applies to trusts that held excluded property at 30 October 2024. Settlors of trusts settled before 30 October 2024 are not subject to gift-with-reservation treatment over the excluded property element.

What it means in practice — three positions

Position 1: arriving in the UK now

If you have been non-resident for the last 10+ years and are moving to the UK, claim FIG. Four years of full exemption on foreign income and gains, plus OWR up to £300k of foreign employment income, is more generous than the old remittance basis was for most people. Plan your departure from FIG before year five if your foreign income would attract material UK tax on the arising basis afterwards.

Position 2: long-standing UK resident former non-dom

You no longer have the remittance basis. The decision is now binary: stay and pay arising basis on worldwide FIG, or leave.

If you stay:

• Use the TRF in 2025/26 and 2026/27 at 12% to clean your offshore stack. Waiting until 2027/28 costs you 3 percentage points and a tighter window.
• Consider CGT rebasing to April 2017 for personally-held foreign assets.
• Review excluded property trusts — settlor protections are gone, and trustees may face 10-year and exit charges going forward.

If you leave:

• The IHT tail (3–10 years post-departure) means severing tax presence does not sever IHT exposure straight away.
• Temporary non-residence rules can drag certain income back into the UK if you return inside 5 years.
• Some destinations specifically designed for inbound wealth are receiving most UK leavers — see "Where former non-doms are going" at the bottom of this page.

Position 3: in or after a 4-year FIG window

Plan now for year five. Two common patterns:

• Restructure foreign income sources before the FIG window ends — convert taxable foreign income streams into UK-tax-deferred vehicles where possible.
• Move to a destination with a complementary regime — Italian flat tax (€200k), Spanish Beckham regime (24% flat on Spanish employment income), Swiss lump-sum (forfait fiscal), or a territorial system (Singapore, Hong Kong).

Statutory Residence Test (SRT) and timing

The Statutory Residence Test still determines whether you are UK resident in any given tax year. It has three parts, applied in order:

1. Automatic overseas tests. If any one applies, you are non-resident — for example, fewer than 16 days in the UK if you were resident in any of the previous three tax years.
2. Automatic UK tests. If any one applies, you are resident — for example, 183+ UK days, or your only home is in the UK.
3. Sufficient ties test. If neither auto test resolves it, the number of UK ties (family, accommodation, work, 90-day, country) combined with UK days decides residence.

Split-year treatment automatically applies in eight statutory cases — three for leavers, five for arrivers. The most common are Case 1 (starting full-time work overseas), Case 3 (ceasing to have a home in the UK), and Case 4 (starting to have a home in the UK only).

Temporary non-residence (the 5-year rule) catches anyone who was UK resident in 4 of the 7 tax years before departure and returns within 5 years. On return, items arising during the absence are taxed in the year of return: close-company distributions, certain pension lump sums and flexible drawdown, life-policy chargeable event gains, remittances of pre-departure remittance-basis FIG, and CGT on pre-departure assets disposed of while non-resident.

Practical conclusion. A "trial year" abroad is rarely worth attempting. If you plan to leave, plan to stay out for at least five full UK tax years, and design the departure year carefully — your tax year of departure is 6 April to 5 April, not the calendar year.

CGT on departure

There is no general UK exit charge for individuals becoming non-resident. UK CGT continues to apply to:

• disposals of UK land and property (non-resident CGT, NRCGT, since 6 April 2019), with reporting and payment within 60 days via the UK Property Account;
• disposals of assets used in a UK branch, trade or permanent establishment;
• gains caught by temporary non-residence on your return.

CGT rates on residential property in 2025/26 are 18% at basic rate and 24% at higher rate, with an annual exempt amount of £3,000.

Treaty tie-breaker rules (OECD Model Treaty Article 4) can resolve dual residence. HMRC publishes form DT-Individual for treaty relief claims and P85 to notify departure.

Pensions, ISAs and SIPPs

ISA

You can keep an existing ISA open after becoming non-resident, and it continues to grow tax-free. You cannot make new contributions from the tax year after the one in which you cease UK residence (notify your provider). You can withdraw at any time. Contributions can resume if you become UK resident again.

SIPP and overseas transfers

Transferring a UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) is tax-free only if:

• the QROPS is located in your country of residence (or, narrowly, your employer's country), or
• the transfer is within the Overseas Transfer Allowance (£1,073,100 for most individuals as of 2025/26).

Otherwise an Overseas Transfer Charge of 25% applies. The EEA/Gibraltar exemption was removed from 30 October 2024, so transfers to many previously-popular destinations now attract the charge. The 25% charge can also be applied retroactively if your circumstances change within 5 UK tax years after transfer.

State Pension

To qualify for any UK State Pension you need 10 NI-qualifying years; for the full new State Pension, 35. While abroad, you can pay voluntary contributions:

• Class 2 (currently ~£3.50/week) if you meet the prior-employment and UK-residence tests; or
• Class 3 (~£17.45/week) otherwise.

From 6 April 2026, voluntary Class 2 from abroad is abolished. Only Class 3 remains, and only for people with 10+ prior UK residence or NI years. If Class 2 applies to you, the window to enrol is closing.

Common pitfalls

• Misreading "domicile abolition" as a clean slate. Worldwide IHT exposure now follows residence under the LTR test, with a 3–10 year tail after departure. Domicile-of-origin no longer helps you, but neither does it harm you — what matters is days in the UK.
• Skipping the TRF window. Designation at 12% in 2025/26 is materially better than waiting until 2027/28 at 15%, and far better than ordinary remittance after the window closes.
• Trial leaving for a year. Temporary non-residence catches returns within 5 years and re-taxes the gap. Plan for at least 5 full UK tax years out.
• Overseas Transfer Charge on SIPP transfers. Post-30-October-2024 the EEA shelter is gone. Check OTA capacity and destination jurisdiction before initiating.
• Pre-IPO carry and deferred comp. Some forms of deferred employment income do not benefit from OWR even inside the FIG window. Model carefully.
• EPT settlor exposure. Settlors of pre-30-October-2024 EPTs are sheltered from gift-with-reservation but not from relevant-property charges during LTR periods.

For US persons

If you hold a US passport, green card, or are otherwise a US tax resident, none of the above removes US tax. US citizens are taxed on worldwide income regardless of where they live. The UK-US double tax treaty, FATCA, and PFIC/CFC rules all continue to apply. A dedicated US-perspective version of this guide is in preparation; this page focuses on UK tax exposure only.

Where former non-doms are going

The most commonly cited destinations, based on advisor surveys and the OBR's behavioural assumptions:

• Italy — €200k–€300k flat tax for 15 years. The lump-sum regime was raised to €300,000 per year for new entrants from 10 August 2024 (€200,000 if you applied before). Plus €25,000 per additional family member. Requires 9 of the 10 preceding years non-Italian-resident.
• Switzerland — lump-sum taxation (forfait fiscal). Expenditure-based; federal minimum taxable base is currently CHF 434,700, with effective annual federal+cantonal tax typically between CHF 250,000 and CHF 1m depending on canton.
• UAE. No personal income tax; the Golden Visa offers 10-year renewable residence on AED 2m property investment.
• Monaco. No personal income tax for residents who are not French nationals.
• Spain — Beckham Law. 24% flat on Spanish employment income up to €600,000 for six tax years; 0% on most foreign-source passive income. Compatible with Spain's Digital Nomad Visa.
• Portugal — IFICI (the "NHR 2.0"). 20% flat on Portuguese income for individuals in approved high-value sectors, for 10 years. Materially narrower than the old NHR.
• Singapore and Hong Kong. Territorial taxation; most foreign-source income exempt.

The right destination depends on the mix of (a) where your active income comes from, (b) whether you hold UK assets you cannot easily move, (c) family commitments, and (d) your IHT exposure path.

FAQ

Last reviewed: 21 May 2026

Disclaimer. This page is provided for general information only and does not constitute legal, tax or financial advice. UK tax rules change frequently and the position above reflects Finance Act 2025 and HMRC guidance as at the date of last review. Consult a UK-qualified solicitor and a chartered tax adviser (CIOT / STEP / ICAEW) before acting on any of the above.

Primary sources. HMRC Technical Note "Reforming the taxation of non-UK domiciled individuals" (October 2024); HMRC manuals RFIG41000, RFIG44000, RDRM71000, RDRM76100, IHTM47020; Helpsheets HS266 and HS278; HMRC guidance note RDR3; HMRC statistical commentary on non-domiciled taxpayers; Office for Budget Responsibility supplementary forecast (Oct 2024); CW Economics non-dom reform assessment (Oct 2025); Macfarlanes, Deloitte TaxScape and Chambers practitioner briefings on FA 2025.