The New Foreign Income and Gains Regime

The old Non-UK Domicile rules are coming to a welcome end on 5^th April 2025. The replacement regime focuses on those that have settled in the UK and become Long-Term Resident.

From 6 April 2025 the new 4 year foreign income and gains (“FIG”) regime applies to individuals who become UK tax resident after having previously been non-UK resident for a period of 10 years or more.

Under the new regime eligible individuals making a valid claim will not pay tax on FIG arising in the first 4 years of residence. They will be able to bring these funds to the UK without triggering a tax charge.

This is much simpler than the old regime where non-uk domiciled remittance basis users had to track their offshore income and gains indefinitely, and to benefit from the system had to pay the Remittance Basis Charge (“RBC”) after a prescribed number of tax years.

Up to and including the 2024/25 tax year the RBC applies to individuals who:

• Are aged 18 or over in the tax year.
• Have been a UK resident for:
  • 7 out of the previous 9 tax years (7-year test)
  • 12 out of the previous 14 tax years (12-year test)

It applies at a rate of

• £30,000 for individuals meeting the 7-year test
• £60,000 for individuals meeting the 12-year test

There was also a £90,000 charge applied only until 6 April 2017 when the deemed domicile rules were introduced.

Along with the new regime comes a Temporary Repatriation Facility (“TRF”) which will allow those who have previously been taxed on the remittance basis and who have unremitted income and gains to remit them and pay tax at a reduced rate. The TRF will be available for three years from 6 April 2025.

The reduced rates will be as follows:

• 12% in the 2025/2026 and 2026/2027 tax years; and
• 15% in the 2027/2028 tax year

If you require any assistance with this or any other aspect of your client’s tax affairs, please get in touch today.

Jim Calverley
Senior Tax Consultant

For more information, contact us at consultany@vantagefeeprotect.com