Moving to the UK? The 4-Year Foreign Income and Gains Regime Explained

If you are moving to the UK, or returning after many years abroad, the way the UK taxes your overseas income changed fundamentally on 6 April 2025.

The old "non-dom" remittance basis has gone. In its place is a simpler, residence-based four-year foreign income and gains (FIG) regime. For those who qualify, it can mean no UK tax at all on foreign income and gains for the first four years, even if the money is brought into the UK.

This guide explains who qualifies, what the regime covers, what it costs, and what happens when the four years end.

Step one: will you be UK tax resident?

Everything starts with the Statutory Residence Test (SRT). It decides, year by year, whether you are UK tax resident. In broad terms:

• You are automatically resident if you spend 183 days or more in the UK in a tax year, or your only home is in the UK.
• You are automatically non-resident if, for example, you spend fewer than 16 days in the UK (or 46 days if you were not resident in any of the previous three years).
• Between those, the sufficient ties test looks at family, accommodation, work, days spent and time in the UK in previous years.

The UK tax year runs from 6 April to 5 April. If you arrive part-way through, split-year treatment may divide the year into a non-resident part and a resident part. For the FIG regime, a split year still counts as a full year of UK residence.

Who qualifies for the FIG regime?

You are a "qualifying new resident" if you become UK tax resident after at least 10 consecutive tax years of non-residence.

Key points:

• Domicile and nationality do not matter. British citizens returning after a decade or more abroad qualify on the same basis as anyone else. This is a big change from the old regime, which UK-domiciled returners could not use.
• The 10 years must be consecutive. A single year of UK residence in that window can break eligibility.
• Treaty residence does not help. Even if a tax treaty treats you as resident elsewhere, a year of UK residence under the SRT still counts against you.
• If you arrived before April 2025, you could use the regime for whatever remains of your first four years, provided you had the 10-year gap before arriving.

If you have not been away for 10 years, the FIG regime is not available at all. You will be taxed on your worldwide income and gains from day one of UK residence.

What the regime covers

For up to four tax years, starting with your first year of UK residence, you can claim exemption from UK tax on:

• Foreign income, such as overseas interest, dividends and rental income.
• Foreign capital gains, such as gains on overseas shares or property.
• Distributions from non-UK trusts, subject to the detailed rules.

Unlike the old remittance basis, it does not matter whether you bring the money into the UK. You no longer need separate "clean capital" bank accounts to avoid tax on remittances.

UK-source income, such as UK salary, UK rent and UK dividends, is taxed in the normal way.

Overseas Workday Relief

If you are employed and some of your work is done outside the UK, you may also claim Overseas Workday Relief (OWR). It exempts employment income for duties performed abroad, again for up to four years.

OWR is capped at the lower of 30% of your qualifying employment income or £300,000 a year. You need good records of where you worked each day to support a claim.

What a claim costs

The regime is not automatic, and it is not free.

• You must claim it each year on your Self-Assessment return and quantify the foreign income and gains you are claiming relief on.
• You lose your personal allowance (£12,570) and your capital gains annual exempt amount for any year you claim, including a year where you only claim OWR.
• You cannot use foreign losses for any year in which you claim.

For someone with modest foreign income, losing the personal allowance can cost more than the relief is worth. The claim is made year by year, so you can choose whether to claim in each of the four years.

Year five onwards: worldwide taxation

From your fifth year of UK residence, you are taxed on your worldwide income and gains, like any other UK resident.

The four years are therefore best treated as a planning window:

• Realise foreign gains during the four years where possible, so later growth starts from a higher base cost.
• Review offshore funds. Non-reporting offshore funds can produce income-taxed "offshore income gains" once you are fully in the UK system.
• Check investment wrappers. Products that are tax-efficient abroad, such as US 401(k)s or Australian super, may be treated very differently by the UK.
• Plan the use of overseas cash. Income earned in years one to four can be brought in tax-free; income earned after that cannot.

Inheritance tax: the 10-year clock

Inheritance tax now follows a long-term residence test rather than domicile.

• While you are not a long-term resident, only your UK assets are within UK inheritance tax (40% above the £325,000 nil-rate band).
• Once you have been UK resident for 10 of the previous 20 tax years, your worldwide estate comes into scope. In practice that is from your 11th year of UK residence.
• If you later leave, UK inheritance tax can continue to apply to your worldwide estate for between 3 and 10 years, depending on how long you lived here.

Anyone planning to settle in the UK long-term should think about how their overseas assets are held well before year 10.

Other points to consider before you arrive

• Exit taxes in your current country. Some countries charge tax on unrealised gains when you leave.
• Double tax treaties. These decide which country can tax pensions, dividends and employment income in the year you move, and help prevent double taxation.
• Former UK residents who were away only briefly should check the temporary non-residence rules, which can tax certain income and gains received while abroad when you return.
• Former remittance basis users may still be able to use the Temporary Repatriation Facility to bring pre-April 2025 foreign income and gains into the UK at a flat 12% (2026/27) or 15% (2027/28).

Example

Ana is a Brazilian software engineer who has never lived in the UK. She moves to London in May 2026 on a new job.

• She meets the 10-year test, so she is a qualifying new resident.
• For 2026/27 to 2029/30 she can claim exemption on her Brazilian rental income and on gains from selling shares held in Brazil, whether or not she brings the money to the UK.
• She spends some weeks working from São Paulo for her UK employer and can claim Overseas Workday Relief for those days.
• In each year she claims, she loses her personal allowance, so her UK salary is taxed from the first pound.
• From 2030/31 her worldwide income is taxable in the UK. From around 2036/37 her worldwide estate would fall within UK inheritance tax.

What to consider before moving to the UK

The FIG regime can offer significant tax benefits, but eligibility does not automatically mean claiming is the best option.

Before moving, it is worth reviewing your tax residency, overseas income and investments, and understanding how your tax position may change once the four-year period ends.

Planning ahead can help avoid unexpected tax consequences.

This article is for general information only and does not constitute tax advice. Information is correct as of 26 October 2026 and may change following the UK Autumn Budget on 28 October 2026.