UK — Non-Dom & FIG Regime

|---| | Country | UK | | Old regime | Remittance basis (domicile-based) — abolished from April 2025 | | New regime | 4-year Foreign Income and Gains (FIG) exemption | | FIG effective | From 6 April 2025 | | FIG duration | First 4 tax years of UK tax residence | | FIG rate on foreign income/gains | 0% for qualifying new residents | | After 4 years | Worldwide basis — all income/gains taxed in UK | | Primary legislation | Finance Act 2025 (amending ITTOIA 2005 and TCGA 1992) | | Tax authority | HMRC (gov.uk) | | Verified by | Live status: https://openaccountants.com/skills/uk-non-dom |

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Section 2 — The New FIG Regime (From April 2025)

The UK abolished the remittance basis / domicile-based non-dom regime from 6 April 2025.

Replacement: the 4-year Foreign Income and Gains (FIG) exemption.

Who qualifies:

• Any individual who becomes a UK tax resident on or after 6 April 2025
• AND was not UK tax resident in any of the preceding 10 tax years

What is exempt:

• All foreign income (dividends, interest, rent, employment income from foreign employer) arising while the individual is in their first 4 years of UK tax residence
• All foreign capital gains arising while in the first 4 years

What is NOT exempt:

• UK-source income and gains — taxed normally regardless of FIG status
• Foreign income/gains arising AFTER the 4-year window

The FIG window is absolute: no extension, no exceptions. After 4 tax years of UK residence, the individual is taxed on worldwide basis from year 5 onwards.

No election needed: FIG applies automatically. The individual may elect OUT (e.g. if they want to use foreign losses against UK income) but there is no requirement to file a special claim.

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Section 3 — Transitional Provisions: Existing Non-Doms

For individuals who were already using the remittance basis before 6 April 2025:

Option 1 — Temporary Repatriation Facility (TRF): A 3-year window (2025/26, 2026/27, 2027/28) to bring previously unremitted foreign income and gains to the UK at a reduced flat rate:

• 12% for amounts remitted in 2025/26 and 2026/27
• 15% for amounts remitted in 2027/28

After 2027/28, unremitted pre-2025 income remitted to the UK is taxed at full normal rates.

Option 2 — Rebasing of foreign capital gains: Foreign assets (other than non-UK real estate) can be rebased to their 5 April 2019 market value for CGT purposes. Only applies to individuals who claimed the remittance basis in 2016/17 or earlier.

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Section 4 — Before April 2025: Remittance Basis (History)

The old regime (now abolished for new arrivals) worked as follows:

• UK residents who were not domiciled in the UK could elect for the remittance basis
• Foreign income and gains were taxed only when remitted to the UK
• Annual remittance basis charge: £30,000 (after 7 years UK residence) / £60,000 (after 12 years)
• After 15 years UK residence: deemed domiciled — remittance basis no longer available

This system is now history for new residents. The FIG regime replaced it.

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Section 5 — Overseas Workday Relief (OWR)

Overseas Workday Relief (OWR) continues under the new regime.

OWR allows UK-resident employees to exclude from UK tax the proportion of employment income attributable to non-UK workdays (days physically working outside the UK).

Under the new FIG regime, OWR is available for the first 4 years of UK residence (aligned with FIG), without the remittance condition that applied under the old regime.

Formula:

UK-taxable employment income = Total employment income × (UK workdays / Total workdays)

Requires keeping a contemporaneous workday log.

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Section 6 — Sources

• Finance Act 2025, Part X (FIG provisions)
• HMRC: gov.uk/guidance/non-domicile-rules
• HMRC RDRM (Residence, Domicile and Remittance Manual)

Working paper only. The FIG regime is new (effective April 2025). HMRC guidance is still being finalised. Engage a UK tax adviser for any individual relying on FIG — particularly those in years 3-4 approaching the worldwide basis transition.