Concept
From 6 April 2025 the remittance basis and domicile as a connecting factor for personal tax were abolished. All UK residents are now taxed on the arising basis on worldwide income and gains, with a four-year Foreign Income and Gains (FIG) regime for qualifying new residents and transitional relief for former remittance-basis users. Residence itself is still decided by the Statutory Residence Test, so the first question in any case is how many UK tax years the person has actually accumulated. HMRC's RDRM71000 confirms that from 6 April 2025 the remittance basis can no longer be used.
This is general legal information, not individual tax advice. UK residence, treaty position, trust attribution, company residence and IHT exposure turn on facts and documents.
What changed on 6 April 2025
| Change | Effect |
|---|---|
| Remittance basis abolished | Foreign income and gains taxed on the arising basis like any UK resident |
| 4-year FIG regime introduced | Qualifying new residents with 10+ consecutive prior non-resident tax years get four UK tax years of relief on eligible foreign income and gains |
| Temporary Repatriation Facility | Flat designation charge on pre-6 April 2025 offshore income and gains: 12% for 2025/26 and 2026/27, 15% for 2027/28 |
| Deemed domicile abolished | The Statutory Residence Test now does the work for income tax and CGT |
| IHT long-term residence test | Worldwide IHT exposure once UK resident in 10 of the previous 20 tax years, with a 3–10 year tail after departure |
| Protected settlements repealed | Offshore trust income and gains attributable to a long-term-resident settlor are taxable as they arise |
The 4-year FIG regime
A qualifying new resident is UK resident now and was non-UK resident throughout the 10 consecutive tax years before the year of arrival. HMRC's 4-year foreign income and gains guidance sets out the relief. The benefit runs for four consecutive UK tax years from arrival and is claimed annually on the Self Assessment residence pages SA109. Inside the window, eligible foreign income and foreign chargeable gains can be relieved. Because the four years run from arrival rather than from 6 April 2025, an individual who became UK resident in 2022/23 or 2023/24 already has fewer than four years left and is a qualifying new resident only for those residual years.
Foreign employment income runs through Overseas Workday Relief rather than FIG. HMRC's Overseas Workday Relief guidance confirms the relief is for the same four-year qualifying period and is subject to an annual limit of the lower of £300,000 or 30% of qualifying employment income. An OWR election forfeits the personal allowance, the capital gains annual exempt amount and the ability to claim foreign losses for that year. After four years the individual is taxed on the arising basis like any other UK resident.
Temporary Repatriation Facility
Designation charge
HMRC's HS264 and RDRM71000 set the rate at 12% for 2025/26 and 2026/27 and 15% for 2027/28. It is a charge on capital with its own designation mechanics.
What it covers
Pre-6 April 2025 foreign income and gains for former remittance-basis users, including certain pre-2025 amounts in offshore trusts attributable to the settlor. Designated amounts must be identifiable in the offshore source.
The window
The facility is compatible with a fresh FIG window. After 5 April 2028 it closes and undesignated pre-6 April 2025 amounts fall back to ordinary remittance charges with no preferential rate.
Inheritance tax and the long-term residence test
HMRC's long-term UK resident guidance explains that from 6 April 2025 inheritance tax follows residence, not domicile. A person UK resident for 10 of the previous 20 tax years is a long-term resident and within IHT on worldwide assets on a transfer or on death. The status carries a tail after departure: three years for 10 to 13 years of residence, scaling to ten years, and ten consecutive non-resident tax years reset the test. UK-situs assets are always within IHT. Overseas assets settled into a trust can also stay within IHT depending on when they were settled and where they were situated, so settlors should treat a change in long-term-resident status as a trustee event.
Offshore trusts after the reform
The reform reached settlor-interested offshore trusts as well. Protection for foreign income and gains is gone: a UK-resident settlor who does not qualify for the FIG regime is taxed on the trust's income and gains as they arise where the settlor, a spouse or a child or grandchild can benefit. For inheritance tax, non-UK assets in the trust become relevant property once the settlor is a long-term resident, so the trustees face the ten-year anniversary charge of up to 6% and a pro-rated exit charge when the settlor ceases to be a long-term resident. A change in the settlor's long-term-resident status is therefore a trustee event as much as a personal one.
The three positions
Arriving now
A new arriver with 10+ prior non-resident years claims FIG for four years and OWR for foreign employment income up to the limit. Plan the exit from FIG before year five, when worldwide income meets the arising basis.
Long-standing former non-dom
FIG is not available to existing residents. The tools are the TRF for the pre-6 April 2025 stack, the CGT rebasing election where it applies, and ordinary planning. Designating at 12% in 2025/26 or 2026/27 is cheaper than waiting for 2027/28.
In or after a FIG window
Plan year five before it arrives: review which foreign income streams meet the arising basis, the long-term-residence IHT count, and the departure tests if leaving is on the table.
CGT rebasing to 5 April 2017
A separate transitional relief lets a former remittance-basis user elect, asset by asset, to rebase the acquisition cost of personally held foreign-situs assets to their value on 5 April 2017. It is available where the remittance basis was claimed in a relevant year and the individual was never UK-domiciled or deemed-domiciled before 6 April 2025. For long-held foreign assets it can shelter historic gains and may be worth more than the TRF in absolute terms, so it should be modelled alongside it.
Residence and departure
The Statutory Residence Test still decides UK residence for each year, applied in order: automatic overseas tests, automatic UK tests, then sufficient ties. HMRC's RDR3 guidance sets out the test and split-year cases. Temporary non-residence catches a person who was UK resident in 4 of the 7 tax years before departure and returns within five tax years, re-taxing certain income and gains arising during the absence in the year of return. UK residential property disposals by a non-resident stay within UK CGT, with reporting and payment normally within 60 days under HMRC's property gains guidance. A trial year abroad rarely works; departure should be planned for at least five full UK tax years.
Common mistakes
- Reading domicile abolition as a clean slate when worldwide IHT now follows the long-term residence test and its tail.
- Skipping the TRF window: 12% in 2025/26 beats 15% in 2027/28 and ordinary remittance afterwards.
- Assuming FIG is open to an existing UK resident — it is only for qualifying new residents with 10+ prior non-resident years.
- Treating all foreign employment income as FIG instead of running it through OWR within the limit.
- Leaving for a single year and being caught by temporary non-residence on return.
Advisor trigger
A chartered tax adviser can handle FIG claims, OWR and TRF designations where the residence history and records are clean. A UK tax solicitor should be involved where there are offshore trusts, business investment relief history, a CGT rebasing election, a long-term-residence IHT position, a contested treaty tie-breaker or prior non-disclosure.
For US persons
A US passport, green card or US tax residence does not switch off US tax. US citizens are taxed on worldwide income wherever they live, and the UK-US treaty, FATCA and the PFIC and CFC rules continue to apply. The US estate tax runs on its own residence-and-citizenship logic that does not track the UK long-term-residence test, so the two regimes have to be mapped together. The UK changes here address UK exposure only; the US-side analysis is separate.
Q&A
When did the remittance basis end
For income tax and capital gains tax, on 6 April 2025. The remittance basis is no longer available to anyone, regardless of domicile of origin, and the arising basis applies subject to the FIG regime for qualifying new residents.
Who qualifies for the 4-year FIG regime
A person who is UK resident now and was non-UK resident throughout the 10 consecutive tax years before arrival. The relief runs for four consecutive UK tax years and is claimed on SA109. Foreign employment income runs through OWR within the £300,000 or 30% limit.
Can offshore funds be brought to the UK at a reduced rate
For former remittance-basis users, yes — under the Temporary Repatriation Facility. Pre-6 April 2025 foreign income and gains can be designated at 12% in 2025/26 and 2026/27 and 15% in 2027/28. After 5 April 2028 the facility closes.
Does leaving the UK end inheritance tax exposure
Not immediately. IHT follows residence: a long-term resident — UK resident in 10 of the previous 20 tax years — keeps worldwide IHT exposure for a tail of three to ten years after leaving, and ten consecutive non-resident tax years reset the test.
Is FIG worth it for an existing UK resident
No. FIG is only for qualifying new residents with 10+ consecutive prior non-resident years. Existing residents, including former non-doms, are on the arising basis and use the TRF, the CGT rebasing election and ordinary planning instead.
Related on the wiki: the old remittance basis, the UK residence test, Cyprus non-dom, Italy's flat tax, the Swiss lump-sum, UAE residence and exit taxes.
Official guidance: HMRC Residence and FIG Regime Manual and the Temporary Repatriation Facility guidance.