The UK’s New 4-Year FIG Regime

The UK’s New 4-Year FIG Regime: What It Means for New Arrivals

If you’re planning a move to the UK, tax probably isn’t the first thing on your checklist. Finding somewhere to live, starting a new job and getting settled tend to take priority. However, spending a little time understanding the UK’s tax rules before you arrive could make a significant difference.

One of the biggest changes in recent years has been the introduction of the Foreign Income and Gains (FIG) regime, which replaced the old non-dom rules from 6 April 2025.

The change has been widely reported, but it’s also created plenty of confusion. We regularly speak to people who assume the old non-dom rules still apply, while others think the new regime automatically exempts all overseas income from UK tax.

Neither assumption is quite right.

A completely different approach

Under the previous rules, much of the focus was on an individual’s domicile status. The new regime takes a different approach.

Instead of asking where someone is domiciled, the legislation looks at their UK residence history. In simple terms, the question is no longer “Where is your permanent home?“ but “How long have you been UK tax resident?“

That change has made the rules easier to understand in some respects, but it also means anyone moving to the UK should consider their tax position before they arrive, rather than afterwards.

Who is the regime designed for?

The FIG regime is intended for individuals who are becoming UK tax resident after spending a significant period living outside the UK.

If you satisfy the qualifying conditions, you may be able to claim relief on eligible foreign income and gains for your first four tax years of UK residence.

The important point, however, is that eligibility isn’t based simply on the date you arrive in the UK. Your previous UK residence history plays a key role, so it’s worth checking your position carefully rather than assuming you’ll automatically qualify.

Why does this matter?

For many people moving to the UK, life doesn’t stop at the border. You may still have overseas investments generating income, rental properties in another country, foreign bank accounts or assets that you intend to sell in the future.

Understanding how those income streams and gains will be taxed in the UK can have a significant financial impact. Where the FIG regime applies, qualifying foreign income and gains may fall outside the scope of UK tax during the relief period, providing valuable flexibility during your first few years of UK residence.

The biggest opportunity is often before you move

One of the most common conversations we have with clients is not about claiming relief once they’ve arrived in the UK. It’s about what should have been done beforehand.

Moving country is often a natural point to review your affairs.

You might decide to reorganise investments, consider the timing of selling an overseas asset or simply understand how your income will be taxed once you’re here.

Those decisions can look very different depending on whether they’re made before or after you become UK tax resident. That’s why early planning is often one of the most valuable parts of the process.

It’s not the only thing to think about

Although the FIG regime can provide valuable relief, it’s only one part of your overall UK tax position.

Questions often arise around:

• when you actually become UK tax resident;
• whether overseas structures should be reviewed;
• how double taxation relief may apply;
• what happens once the four-year period ends; and
• how the wider UK tax rules affect your longer-term plans.

Looking at the FIG regime in isolation rarely gives the full picture.

A practical example

Imagine Alicia has lived in Thailand for the last ten years before relocating to the UK for work. She owns an overseas investment portfolio, receives rental income from a property abroad and plans to sell some investments in the near future.

Without understanding how the UK rules apply, she could easily assume all of those income streams will immediately become taxable in the UK. In reality, if she qualifies for the FIG regime, the position may be much more favourable.

Equally, if planning opportunities are only considered after she has moved, some of the options that were available beforehand may no longer exist. It’s a good reminder that international tax planning is often about getting the timing right as much as understanding the legislation itself.

So, what does this mean for you?

The introduction of the FIG regime has changed the way many new arrivals to the UK are taxed, creating opportunities that simply didn’t exist under the previous rules.

However, whether those opportunities are available depends entirely on your individual circumstances and, in many cases, the decisions you make before becoming UK tax resident.

Taking advice early won’t just help you understand the rules; it can help you make informed decisions before those decisions become much harder to change.

Next Steps

If you’re planning a move to the UK or have recently arrived, get in touch with ETC Tax and we’d be delighted to help you understand how the FIG regime could apply to you.