Prior to April 2025, an individual resident in the UK but not UK domiciled, had the option to be taxed on foreign income and gains to the extent they were ‘remitted’ (brought) to the UK. In contrast, a UK resident and UK domiciled individual, did not have this option and would be taxable on the foreign income or gains as they arose.
By Tom Annat – Senior Tax Manager
Foreign income and gains (FIG regime)
From 6 April 2025, the remittance basis of taxation is to be abolished and will be replaced with a new regime linked to the number of years of residency. This will be known as the foreign income and gains regime (FIG regime). The regime will allow individuals who have been UK resident for a period of less than 4 years (following 10 consecutive years of non-UK residence) to bring foreign income and gains into the UK without a UK tax charge for the first 4 years of residency (during the tax years 2025/26 to 2028/29).
Temporary repatriation facility (TRF)
Transitional rules are to be introduced for those who were remittances basis users prior to 6th April 2025. In summary, these are
- Temporary repatriation facility (TRF) from 2025/26 to 2027/28 to allow unremitted foreign income and gains to be brought into the UK and pay a flat rate of tax (12% and rising to 15%)
- Rebasing of foreign assets to their market value as at 5th April 2017
Are you ready for these changes?
These changes have the potential to create greater complexity for existing resident non-UK domiciled individuals, recent arrivals and for those planning on coming to the UK in the near future.
Although time is now limited, individuals falling within this new regime may have the ability to undertake some tax planning prior to 5th April 2025. In any event, understanding the position now and for future years will be important. Careful management of your tax affairs and good record keeping will be crucial.
Please get in touch as soon as possible if you would like to understand your non-dom tax situation and how to benefit from professional advice by exploring key tax planning opportunities.
