Foreign Income & Gains (FIG) Rules – What They Mean For You In 2025

Introduction

If you’ve been living or working abroad, or you’ve got investments or income that come from overseas, 6^th April 2025 is a date that had significant implications.

The UK tax system is about to change how it treats foreign income and capital gains for individuals who are resident in the UK but have money coming in from elsewhere. To put it bluntly, the HMRC net is getting a little tighter.

So what’s actually changing and how might it affect you?

What Are the FIG Rules?

FIG stands for Foreign Income and Gains and from April 2025 the way these are taxed in the UK will shift to a new regime replacing the old remittance basis tax treatment that was usable by resident non domiciled individuals.

In short that benefit is ending and instead there will be a new four year FIG regime for people who became residents after a period of non residence, it’s important to note that you must have been outside of the country (and non UK tax resident) for ten years.

Therefore the FIG regime is available for a maximum of four consecutive tax years immediately following a period of non residence for at least ten consecutive tax years.

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Key Changes To Know

Here is the short version of what is changing and what you need to know:

The remittance basis is being scrapped, no more deferring UK tax by keeping your foreign income overseas
Under the new FIG rules, for your first four years of UK tax residency, foreign income and gains arising during that period can be brought into the UK without triggering UK tax (provided you meet the conditions).
If you elect to treat this income under FIG you’ll lose your UK income tax personal allowance and your capital gains tax allowance as well as any potential marriage allowance sharing

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What You Can Do Now

Review your tax residency status to check whether you can claim exemptions under the FIG regime
Look at your foreign income sources and plan to close these down within four years of arriving in the UK
Speak to your accountant early to ensure decisions around moving to the UK are being done with all information and in a smart, considered and strategic way

And one final thought, if you are planning to move to the UK within the next few years timing is everything and you should look at structuring your overseas income and gains to wrap within four years of arriving in the UK.

For example, if you’ve been living and working in Dubai for over ten years and plan to move back to the UK in 2025 you’ll be able to use the FIG regime for your first four years of UK tax residency. That means you can bring overseas income into the UK without triggering the tax here, giving you a valuable planning window.

Final Thoughts

The FIG reforms are one of the biggest changes to how the UK taxes international income and gains in over a decade. For some it’ll mean higher tax bills however for others it’s an opportunity to restructure and bring funds into the company free of tax implications within the four year window.

Either way it’s something to sort now and not when HMRC start asking questions.

If you’ve got money abroad and are planning a move to the UK or simply want to make sure your structures set up in the smartest way for your situation let’s talk it through.

We’ll take care of the numbers so you can focus on what you do best.