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UK Non-Dom & FIG Regime Guide 2026: Remittance Basis Abolished, 4-Year FIG, IHT Changes

Daniel · CountryTaxCalc Updated April 2026
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KEY INSIGHT
From 6 April 2025, the UK's non-domicile remittance basis regime was abolished. It is replaced by the 4-year Foreign Income and Gains (FIG) regime: new UK tax residents who have not been UK-resident in any of the prior 10 tax years can exempt ALL foreign income and gains from UK tax for their first 4 tax years in the UK. After 4 years, worldwide income and gains are fully taxable. A Temporary Repatriation Facility (TRF) allows pre-April 2025 offshore income to be brought to the UK at a reduced rate of 12% in 2025–26 and 2026–27, rising to 15% in 2027–28.
At a glance

Key Facts

The Old Regime vs the New FIG Regime
Old remittance basis regime (abolished 6 April 2025): Non-UK domiciled individuals could elect to be taxed on UK income and gains plus only foreign income and gains 'remitted' (brought to, used in, or benefiting) the UK. Foreign income kept offshore: not taxed in the UK. Cost: loss of UK personal allowance and CGT annual exempt amount; Remittance Basis Charge of £30,000 (7-12 UK tax years), £60,000 (12-17 years), or £90,000 (17+ years) for non-doms with significant income. This regime attracted wealthy non-UK domiciled individuals to the UK — particularly from Russia, India, the Middle East, and Hong Kong. New FIG regime (from 6 April 2025): Available to: individuals who become UK tax resident after being non-UK resident for all of the prior 10 UK tax years. Duration: the first 4 UK tax years of residence. Benefit: ALL foreign income and gains are exempt from UK income tax and CGT during the 4-year period — whether remitted to the UK or not. No separate election required; automatic if qualifying conditions are met. After 4 years: full UK worldwide taxation applies. Key improvement vs old regime: no remittance basis charge; no restriction on remitting foreign income to the UK during the FIG period. Key restriction vs old regime: fixed 4-year window (old regime had no expiry); requires 10-year clean-break of UK residence before becoming available again.
Temporary Repatriation Facility (TRF): Bringing Old Offshore Income to the UK
The Temporary Repatriation Facility (TRF) was introduced alongside the FIG reform to encourage existing and former non-doms to bring pre-April 2025 offshore income and gains to the UK. How it works: individuals who previously used the remittance basis can designate pre-April 2025 foreign income and gains and bring them to the UK at a reduced UK tax rate. TRF rates: 2025–26 tax year: 12%. 2026–27 tax year: 12%. 2027–28 tax year: 15%. After 2027–28: TRF closes — any remaining offshore income brought to the UK is taxed at full UK rates. Who can use TRF: individuals who previously used the remittance basis (either formally paid the RBC or used the automatic £2,000 de minimis or were within the first 7 years and used remittance basis without charge). What can be designated: pre-April 2025 foreign income and gains that arose in any year when the individual used the remittance basis. Important: TRF is a voluntary, time-limited opportunity. Many long-term non-doms who have accumulated significant offshore income and gains should model whether TRF at 12% is better than waiting (and potentially having those funds taxed at full rates if remitted later) or investing the offshore funds permanently abroad.
UK Inheritance Tax: The Non-Dom IHT Overhaul from April 2025
The IHT changes for non-doms are arguably more impactful than the income tax changes for long-term residents. Old IHT regime for non-doms: Non-domiciled individuals: UK-sited assets subject to UK IHT at 40%; foreign-sited assets exempt (excluded property). Foreign assets held in excluded property trusts (EPTs): outside UK IHT indefinitely, regardless of how long the settlor lived in the UK. New IHT regime from 6 April 2025: Non-doms who have been UK resident for 10 or more of the prior 20 tax years become 'long-term residents' (LTRs). Once an LTR: ALL worldwide assets (including formerly excluded foreign assets) are subject to UK IHT at 40% — regardless of domicile. Excluded property trust protection: trusts settled before April 2025 by non-doms who were not yet LTRs retain excluded property status for the trust assets, even after the settlor becomes an LTR. This is the critical grandfathering provision — trusts settled before the cut-off date retain protection. New trusts settled after April 2025 by LTRs: no excluded property protection. Loss of LTR status: if you cease UK residence, you leave LTR status and the IHT tail on foreign assets reduces over time (4-year tail for those who were UK resident 10-13 years; 10-year tail for those UK resident 20+ years). This is a new 'long tail' IHT exposure for long-term residents leaving the UK.
Overseas Workday Relief (OWR) Under the New Regime
Overseas Workday Relief (OWR) allows qualifying individuals to exclude from UK income tax the portion of their UK employment income attributable to workdays spent outside the UK. OWR under the new rules (from April 2025): OWR is now available for the first 4 UK tax years for qualifying FIG-eligible individuals (those who have been non-UK resident for 10+ years before arriving). How OWR works: employment income is split based on the ratio of UK workdays to total workdays. The non-UK workday proportion is excluded from UK income tax. Cap: the lower of (a) the amount actually paid into or kept in an overseas account, or (b) the proportion of income attributable to overseas workdays. Importantly — under the new regime, OWR income does NOT need to be kept outside the UK. Under the old regime, OWR required the income to be kept offshore to maintain the exemption — this was administratively burdensome. The new OWR is simpler: the overseas workday fraction is simply excluded, regardless of where the funds are held. Practical use: executives who travel internationally for work and spend a significant portion of their time outside the UK can reduce their UK employment income tax bill substantially. Record-keeping: maintain detailed day-by-day travel records (passport stamps, boarding passes, diary) to support the overseas workday allocation.
Planning Strategies Under the New FIG Regime
The 4-year FIG regime creates specific planning opportunities and constraints: (1) Timing of arrival: arrive in the UK having been non-resident for 10+ consecutive tax years to access FIG. A person who has been UK resident within the prior 10 years does NOT qualify — even one UK tax year of residence in the prior 10 disqualifies the 4-year FIG window. (2) Asset realisation during FIG: sell appreciated foreign assets (shares, property) during the 4-year FIG window — gains are exempt from UK CGT. Timing large capital events (business sales, property disposals) to coincide with FIG years is one of the most valuable planning opportunities. (3) Trust planning: consider whether offshore trusts settled before UK arrival can distribute FIG-year income tax-free to the FIG beneficiary — subject to the trust's applicable anti-avoidance rules. (4) After 4 years: consider whether ongoing UK residence is still beneficial, or whether a period of non-UK residence (to reset the 10-year clock for a future FIG window) is more tax-efficient. The 10-year non-residence requirement means this reset takes a full decade. (5) Spouse planning: each spouse has their own FIG eligibility — if both spouses have been non-UK resident for 10+ years, both can independently benefit from the 4-year FIG window.
Introduction

The UK non-domicile regime was one of the most significant and contested aspects of UK tax law — used by hundreds of thousands of non-UK-domiciled individuals living in the UK to shelter foreign income and gains from UK tax. From 6 April 2025, the regime was substantially reformed, abolishing the remittance basis and replacing it with a residence-based Foreign Income and Gains (FIG) regime. The changes are the most significant restructuring of UK international tax rules in decades, with major implications for wealthy migrants, international investors, and existing long-term non-doms.

Section 01

Who Was Affected by the April 2025 Non-Dom Changes?

The non-dom reform affects several distinct groups differently:

New arrivals to the UK (after 6 April 2025, 10+ years non-UK resident): These individuals access the new 4-year FIG regime automatically. They benefit from the simplification (no remittance restriction, no RBC) and from the improved OWR. The regime is less generous than the old remittance basis (which had no time limit) but cleaner and more accessible.

Existing non-doms in years 1-7 of UK residence before April 2025: These individuals were using the remittance basis without paying the RBC. From April 2025, they switch to FIG rules if they have been non-resident for 10+ years before their most recent UK arrival. In many cases, they are mid-way through their FIG window.

Long-term non-doms (7+ years in the UK before April 2025): These individuals previously paid the RBC (£30,000–£90,000) for remittance basis access. From April 2025, they no longer qualify for FIG (they have been UK resident within the prior 10 years). They are subject to full UK worldwide taxation. The TRF is the primary planning tool available to them for offshore accumulated income.

Excluded property trust settlors: Trusts settled before 6 April 2025 by non-doms who were not yet 'long-term residents' (i.e., had been UK resident fewer than 10 of the prior 20 years as at April 2025): grandfathered. Foreign assets in these trusts remain excluded property for IHT. This is one of the most significant pre-reform planning opportunities that has now closed.

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FAQ

Frequently Asked Questions

I arrived in the UK in 2023 — do I qualify for the 4-year FIG regime?

It depends on your prior UK residence history. To qualify for FIG, you must not have been UK tax resident in any of the 10 tax years immediately before the tax year in which you first become UK resident under the new rules. If you first became UK tax resident in 2023–24 (tax year ending April 5, 2024) and had not been UK resident in any of the 10 prior UK tax years (2013–14 through 2022–23): you qualify for FIG from 2023–24. Your FIG window covers 2023–24, 2024–25, 2025–26, and 2026–27 — four tax years. If your fourth year was 2026–27: from 2027–28, you are subject to full UK worldwide taxation. Important: UK tax years run from April 6 to April 5. Residence is determined by the UK Statutory Residence Test (SRT) — not by visa status or domicile. Count your UK tax years carefully using the SRT split-year rules if applicable.

What happens to my excluded property trust now that non-dom rules have changed?

Excluded property trusts settled before 6 April 2025 retain their protected status for assets that were excluded property at the time of settlement, subject to an important condition: the trust must have been settled by an individual who was not a 'long-term resident' (i.e., had been UK resident fewer than 10 of the prior 20 years) at the time of settlement. If the trust was settled before the cut-off date and the settlor was not yet an LTR: the trust's foreign assets remain excluded property for UK IHT — they are not in the settlor's estate on death, regardless of how many years the settlor subsequently lives in the UK. If the trust was settled after 6 April 2025 by an LTR: no excluded property protection. New trusts settled by LTRs: worldwide assets are within UK IHT scope. The grandfathering provision is the most significant IHT planning outcome of the reform — trusts settled before April 2025 by qualifying individuals are extraordinarily valuable and should be maintained carefully with appropriate legal advice.

Should I use the Temporary Repatriation Facility (TRF) to bring money to the UK?

The TRF decision depends on several factors: (1) Size of your offshore remittance basis income pool: if you have significant pre-April 2025 foreign income sitting offshore (e.g., £2M in a foreign bank account that was never remitted), the TRF at 12% costs £240,000 in UK tax. Without TRF, if you later remit this money after 2028, it is taxed at your full marginal UK rate (up to 45%) — £900,000. TRF saves £660,000. (2) How likely are you to remit the funds? If you plan to spend and invest abroad permanently, TRF may not be necessary. If you need or want to use the funds in the UK (property purchase, business investment, lifestyle expenses), TRF is almost certainly worth using before 2027-28. (3) Interaction with FIG: if you are a new arrival in your 4-year FIG window, you cannot designate the same income for both FIG exemption (post-April 2025 income) and TRF (pre-April 2025 income) — but TRF covers only pre-April 2025 income, so there is no conflict. (4) Capital gains: pre-April 2025 capital gains can also be designated under TRF at 12% — potentially very valuable if you have large unrealised gains on foreign assets that you want to realise in the UK.

I've been in the UK for 12 years as a non-dom — what changes for me from April 2025?

After 12 years of UK residence, you are now a 'long-term resident' (LTR) under the new rules. From 6 April 2025: (1) Income tax: you are subject to full UK worldwide taxation — no FIG exemption (you cannot access FIG as you have been UK resident within the last 10 years). (2) CGT: all worldwide gains are taxable in the UK. (3) IHT: your worldwide assets (including foreign assets) are within the scope of UK IHT at 40%. Your estate is no longer protected by non-domicile status for IHT. (4) Excluded property trusts you settled before April 2025 (when you had been UK resident fewer than 10 of the prior 20 years): these trusts' foreign assets retain excluded property status — this is a significant and permanent protection. (5) TRF: use the TRF window (2025–2028) to bring pre-April 2025 offshore remittance basis income to the UK at 12%/15% — before the window closes and those funds become taxable at full rates on remittance. Practical priority: engage a UK private client solicitor for IHT estate planning review, and a UK tax adviser for TRF modelling, before the TRF window closes in April 2028.
Disclaimer:This guide provides general tax information for educational purposes only. The UK non-dom and FIG regime changes are the subject of ongoing HMRC guidance and legislative refinement. Nothing in this guide constitutes tax or legal advice. Consult a UK-qualified tax adviser and solicitor for IHT estate planning specific to your circumstances.
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