The end of the non-dom regime: what the FIG regime means for you
For more than two centuries, an individual's domicile sat at the heart of how the UK taxed internationally mobile people. On 6 April 2025, that ended.
The remittance basis and non-domiciled status were abolished for income tax and capital gains tax, and replaced with something conceptually simpler: a test based on residence.
What replaced it
The new Foreign Income and Gains (FIG) regime is available to individuals who become UK resident having not been UK resident in any of the previous ten tax years. Those who qualify can claim relief on their foreign income and gains for their first four years of UK residence.
The most practically significant change is this: relief no longer depends on keeping the money offshore. Under the old remittance basis, bringing foreign income into the UK triggered a tax charge, which is why so much planning revolved around segregating bank accounts and tracking the source of every transfer. Under the FIG regime, qualifying foreign income and gains are relieved whether or not you bring them to the UK.
For anyone who has spent years maintaining carefully separated 'clean capital' accounts, that is a meaningful simplification.
What it means if you were already a non-dom
Less welcome news. If you were relying on the remittance basis and you do not qualify for the FIG regime — which will be the case for anyone who has been UK resident for more than the qualifying period — you are taxed on your worldwide income and gains as they arise from 6 April 2025, in the same way as any other UK resident.
Foreign income and gains that arose before 6 April 2025 remain taxable if remitted to the UK afterwards. However, the Temporary Repatriation Facility (TRF) provides a time-limited opportunity to bring those historic funds into the UK at a reduced rate. If you have accumulated unremitted income and gains offshore, this deserves attention now rather than later.
Overseas Workday Relief has changed too
Overseas Workday Relief (OWR) — which reduces UK tax by reference to workdays performed outside the UK — has been brought into line with the new system. From 6 April 2025 it runs on the same residence test as the FIG regime rather than on domicile, it is available for the first four tax years of UK residence, and it is capped at the lower of 30% of qualifying employment income or £300,000 per tax year. Relief no longer depends on the earnings being kept offshore.
The cap is the significant point for higher earners, and it changes the arithmetic on inbound assignments considerably. Transitional rules apply to those already claiming OWR before April 2025.
What you should be thinking about
If you are planning a move to the UK, the four-year clock and the ten-year prior-non-residence condition make the timing of your arrival more important than ever. The most valuable planning still happens before you become resident.
If you are already here, the questions are different: whether the TRF is worth using, how your worldwide income is now taxed, and whether arrangements built around the remittance basis still make sense.
If you are leaving, be aware that residence now drives your inheritance tax position too — which is the subject of our next article.
This article is general information, not advice. The rules summarised here are complex and the right answer depends on your circumstances. Please get in touch for advice on your position.
