Foreign Income and Gains (FIG) regime

Introduction

From 6 April 2025, all UK resident individuals are taxable on their worldwide income and gains on an arising basis. The FIG regime, also effective from 6 April 2025, relieves most foreign income and gains from UK taxation during an eligible individual’s first four tax years of UK tax residence.

This note provides a high-level overview of the FIG regime. Different rules apply for inheritance tax purposes, which are not commented on in this note.

Eligibility

To qualify for the FIG regime, an individual must be a ‘qualifying new resident’, which means:

• The individual is UK resident;
• The tax year is within the first four tax years of the tax year of arrival to the UK (either ever or following a sufficient period of non-UK residence); and
• The individual was not UK resident throughout the ten tax years before arriving in the UK.

The FIG regime can first apply in 2025/26. In 2025/26 it is available to individuals whose UK residence began between 2022/23 and 2025/26 (inclusive). It is not available to individuals who were UK resident in any tax year between 2015/16 and 2021/22 (inclusive).

An individual is UK resident for a tax year if the UK’s statutory residence test for the year is met, including in cases where ‘split-year’ applies for certain tax purposes, and cases where an individual who satisfies the statutory residence test claims to be non-UK resident under a double taxation treaty.

Relievable foreign income and gains

To be eligible for relief, FIG must be of a relievable type which includes:  

• Foreign employment income. Relief is normally capped at the lower of £300,000 and 30% of an individual’s total employment income from employments which are carried out wholly or partly overseas.
• Profits from trades carried on wholly outside the UK.
• A share of partnership profits that relates to a trade carried on wholly outside of the UK.
• Most foreign pension income.
• Rental income from non-UK properties.
• Interest from a foreign source, including interest received in foreign bank accounts.
• Dividends from non-UK resident companies.
• Royalty income and other income from intellectual property.
• Offshore income gains.
• Capital gains arising on disposal of foreign assets, provided the foreign assets does not derive at least 75% of its value from UK land.
• Gains from non-UK resident close companies attributed to UK residents.
• Certain foreign income and gains arising to or from non-UK resident trusts.

Non-relievable foreign income and gains

Some types of income and gains are ineligible for relief under the FIG regime, including:

• Chargeable event gains arising from non-UK insurance policies (sometimes referred to as bonds).
• Performance income.
• Foreign profits of a trade that is carried on partly in the UK, whether alone or in partnership.
• UK income and gains (since the FIG regime applies to foreign income and gains).
• HMRC’s view is that gains made on disposal of cryptocurrency are situated where the beneficial owner of the cryptocurrency is resident – which in essence means that UK resident individuals are regarded as making UK gains on disposal of cryptocurrency and so cannot claim FIG relief on the gains made.

Claiming the relief

Claims are made annually on tax returns. There is no requirement to make a claim, but if claims are not made eligible FIG is not relieved and UK tax is payable in full. Separate claims must be made for foreign employment income, other foreign income and foreign chargeable gains.

Income and gains must be declared on tax returns on a source-by-source basis, though the exact level of detail and entries required is not yet available.

Time limits

Tax returns are due for submission by the 31 January following the end of the tax year (5 April), and can be amended for up to one year after the submission deadline (i.e. the second 31 January following the tax year).

FIG claims must be made in tax returns by the end of the tax return amendment window.

Tax returns for 2025/26 are due by 31 January 2027 and the deadline for making FIG claims is 31 January 2028. It is possible to amend or withdraw 2025/26 FIG claims until 31 January 2028.

Impact on other allowances and reliefs

If a FIG claim is made (any of the three claims), other tax allowances and reliefs are affected. Notably:

• The income tax personal allowance (if available) is lost.
• Certain other allowances are lost, including the blind person's and transferable tax allowances.
• The CGT annual exempt amount is lost.
• Foreign income losses from trades and rental properties and foreign capital losses on disposal of foreign assets are unavailable.
• Finance costs (e.g. mortgage interest) on foreign rental properties cannot be relieved.

Remittances of FIG arising in 2025/26 or later

Foreign income and gains arising in 2025/26 or later can be brought to the UK without tax charges arising, including FIG which has been relieved from taxation under the FIG regime.  

Remittances of pre-6 April 2025 FIG to which the remittance basis applied

Before 6 April 2025 eligible non-UK domiciled individuals were able to pay tax on the remittance basis of taxation, which meant that most types of foreign income and gains were only taxable if they were remitted (brought into) the UK. Foreign funds to which the remittance basis applied continue to be taxable if remitted.  

A temporary repatriation facility (TRF) is available during 2025/26, 2026/27 and 2027/28 and, where claimed, applies a flat rate of tax to remittance basis foreign income and gains.

Individuals who have paid tax on the remittance basis should bear in mind that remittances remain taxable, and should also consider whether they wish to claim the TRF.

Find out more…

This note reflects the law in force as at 30 June 2025. It does not cover all aspects of this subject. If you would like to find out more please contact your usual Deloitte contact or, if you do not have one, Michelle Robinson (michellerobinson@deloitte.co.uk). For further information visit our website at www.deloitte.co.uk.