April 2025 marked the end of a tax regime that had existed in some form for over two centuries. The remittance basis — the rule that allowed non-UK domiciled individuals to pay UK tax only on income and gains brought into the UK — was abolished and replaced by an entirely new framework. For the hundreds of thousands of internationally mobile individuals who relied on non-dom status, the change was significant. But it is not uniformly negative, and for new arrivals in particular, the new rules offer genuine advantages.
This guide explains what existed before, what replaced it, and what it means in practice.
The Old Regime: How the Remittance Basis Worked
Prior to 6 April 2025, UK-resident individuals who were not UK domiciled had the option to claim the remittance basis of taxation. Under this system:
- UK-source income and gains were always taxable in the UK
- Foreign income and gains were taxable in the UK only if remitted to (brought into) the UK
- Foreign income and gains kept offshore remained outside UK taxation indefinitely
In the early years of UK residence, claiming the remittance basis was free. After seven years, a Remittance Basis Charge (RBC) of £30,000 per year applied; after twelve years, the charge rose to £60,000. For high earners with significant offshore income, these were modest charges relative to the tax shielded.
The concept of domicile — a distinctly English legal concept — determined whether an individual could claim non-dom status. Broadly, domicile is the jurisdiction you consider your permanent home; it is not the same as residence or nationality. An individual could live in the UK for decades while retaining a foreign domicile of origin, provided they did not abandon that domicile and acquire an English domicile of choice.
After 15 years of continuous UK residence, a person became deemed domiciled in the UK for all tax purposes — losing the remittance basis and becoming subject to UK tax on worldwide income and gains from that point forward.
Why the Regime Was Abolished
Political opposition to the non-dom regime intensified over many years. Critics argued it created an unfair two-tier system where wealthy incomers paid less tax than UK-born residents on equivalent income. The Labour Party committed to abolition in its 2024 manifesto; on taking office, it implemented this commitment in the Finance Act 2025, with effect from 6 April 2025.
The government's position was that the remittance basis was regressive and that the new regime — shorter in duration but simpler and available to all new arrivals — was a more defensible framework.
The Replacement: The Foreign Income and Gains (FIG) Regime
From 6 April 2025, the remittance basis and deemed domicile concepts were abolished. In their place, the Foreign Income and Gains (FIG) regime applies to new arrivals who meet the qualifying conditions.
Who Qualifies
The FIG regime is available to individuals who:
- Have been non-UK resident for the 10 consecutive tax years immediately preceding their UK residence
- Are in their first 4 tax years of UK residence
Both conditions must be satisfied. There is no domicile test under the new rules.
What the FIG Regime Provides
During the 4-year FIG period, qualifying individuals can elect to exclude from UK taxation:
- All foreign income (dividends, interest, rental income, employment income attributable to overseas workdays)
- All foreign capital gains
The election must be made on the self-assessment return each year. Unlike the old remittance basis, there is no charge for making the election and no requirement to keep funds offshore — foreign income and gains can be freely brought into the UK without UK tax during the 4-year period.
The 4-Year Limit
The FIG regime is shorter than the old non-dom system, under which a non-UK domiciliary with a foreign domicile of origin could potentially remain on the remittance basis for 15 years (the deemed domicile threshold, now abolished). For long-term UK residents who were non-doms, this is the most significant change.
Those who exhaust the 4-year FIG period — because they have already been UK resident for 4 or more years before 2025 — had no transitional FIG period at all. They became subject to full UK taxation on worldwide income and gains from 6 April 2025.
Overseas Workday Relief (OWR)
Overseas Workday Relief was preserved and reformed under the new rules, and operates alongside the FIG regime:
- From 6 April 2025 the OWR period is extended to an employee's first 4 tax years of UK residence (aligned with the FIG regime), for those who qualify
- Provides an exemption from UK income tax on the portion of UK employment income attributable to workdays performed outside the UK
- The relief is now capped at the lower of 30% of qualifying employment income or £300,000 per tax year (those eligible under both the pre-2025 and new regimes can, transitionally, claim for four years without the cap)
OWR is particularly valuable for executives and professionals who spend significant time travelling for work. The amount excluded must be calculated on a just and reasonable basis.
From 6 April 2025, there is no longer a requirement to keep OWR-exempt income offshore — it can be remitted to the UK freely without triggering a UK tax charge.
Transitional Provisions for Existing Non-Doms
The abolition of the remittance basis posed a particular challenge for existing non-doms who had built up substantial accumulated offshore income and gains over many years. Without transitional provisions, bringing those funds to the UK after 2025 would have triggered full UK taxation.
The government introduced two key transitional measures:
Temporary Repatriation Facility (TRF)
The TRF is available for the 2025/26, 2026/27 and 2027/28 tax years. It allows former remittance basis users to bring historic foreign income and gains into the UK at a special flat rate:
- 2025/26: 12%
- 2026/27: 12%
- 2027/28: 15%
These rates are significantly below the income tax and CGT rates that would otherwise apply. The TRF is a one-time opportunity to clean up offshore structures and normalise the position of historic offshore income.
Key points:
- The TRF applies to foreign income and gains accumulated while the remittance basis was claimed — not to future income
- No UK tax on the same funds can have previously been paid
- A formal designation is required on the self-assessment return
- Funds remitted under TRF cannot then be re-segregated as clean capital
For individuals with significant historic offshore income, the TRF deadline at the end of the 2027/28 tax year (5 April 2028) is a planning deadline — and the rate rises from 12% to 15% in that final year, so acting earlier is cheaper. Those who do not take advantage of the TRF and later bring funds to the UK will pay full UK tax rates.
Rebasing of Offshore Assets
Individuals who were claiming the remittance basis on 5 April 2025 can elect to rebase the cost of qualifying overseas assets to their market value on that date. This means that only gains accrued after April 2025 are subject to UK CGT on future disposal.
This is a valuable concession for those holding long-standing offshore assets with significant embedded gains. The election must be made on the self-assessment return for the relevant tax year.
Offshore Trusts: The New Position
The interaction between the FIG regime and offshore trusts is one of the most complex areas of the new legislation.
Prior to 2025, non-doms who had settled offshore trusts before becoming UK resident (or while non-UK domiciled) could benefit from income and gains accumulating in those trusts without a UK tax charge — provided the income and gains were not matched to UK benefits (the "benefits code" and "stockpiled income" rules were complex but manageable).
From April 2025:
- Income and gains arising in offshore trusts in which a UK resident has an interest are, in principle, taxable in the UK as they arise (for UK resident beneficiaries)
- The FIG regime provides some protection during the 4-year qualifying period
- After the 4-year FIG period, trust income and gains matched to UK resident beneficiaries become taxable
Excluded property trusts: for IHT purposes, trusts settled by non-UK domiciliaries holding non-UK assets retain their excluded property status. The IHT exemption for offshore trust assets settled before the non-dom became deemed domiciled continues to apply. This is now the primary remaining advantage of trusts settled by former non-doms.
The trust rules post-2025 require specialist advice. The interaction between FIG regime protection, the transitional provisions, and the trust taxation rules is genuinely complex and there is no substitute for qualified advice from a UK tax adviser familiar with the new legislation.
Practical Impact on New Arrivals
For individuals arriving in the UK from abroad who have not been UK resident for 10 or more years, the FIG regime is straightforwardly more attractive than a remittance basis system that required careful segregation of funds and imposed a charge after year 7.
The 4-year exemption, without any charge and without the remittance restriction, provides genuine simplicity and tax efficiency for:
- International executives relocating to London
- Entrepreneurs establishing a UK business presence
- Families choosing to spend their children's school years in the UK
The limitation is the 4-year duration. Arrivals who plan to remain in the UK long-term should prepare for the transition to full worldwide taxation from year 5, and should structure their affairs — including pension contributions, charitable giving, and offshore trust arrangements — accordingly in the early years of UK residence.
How Global Investments Can Help
The abolition of the remittance basis and its replacement with the FIG regime requires most internationally mobile individuals and former non-doms to review their tax planning comprehensively. The transitional provisions — particularly the Temporary Repatriation Facility and asset rebasing — represent time-limited opportunities that should not be missed.
Global Investments works with clients navigating this transition: assessing the TRF opportunity, reviewing offshore trust structures, and planning for the transition from FIG protection to full worldwide taxation.
Tax rules in this area are complex and recently enacted; some aspects remain subject to ongoing HMRC guidance and legislation. The information in this article reflects the position as understood in June 2026. This article is provided for general information only and does not constitute tax or legal advice. Always take qualified professional advice specific to your circumstances.
To discuss how the changes affect your position, please contact our team.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.