Moving to the UK in 2026: The FIG Regime, Statutory Residence Test and Cross-Border Tax Planning

Key takeaway

The UK's foreign domicile (non-dom) regime was abolished from 6 April 2025 and replaced with a four-year Foreign Income and Gains (FIG) regime. Individuals who become UK resident after at least ten tax years of non-residence can shelter their overseas income and gains from UK tax for their first four years of residence, after which they are taxed on the arising basis on worldwide income and gains. The Statutory Residence Test (SRT) determines residence each year, and double-tax treaties remain essential for avoiding dual taxation. Careful pre-arrival planning — on the timing of income, gains and trust structures — is now the single biggest determinant of a relocating individual's UK tax bill.

Detailed explanation

The end of the non-dom regime

For over two centuries, the UK taxed non-UK-domiciled individuals on the remittance basis — taxing foreign income and gains only when brought into the UK. From 6 April 2025, that regime was abolished. Every individual resident in the UK is now taxed on the arising basis on their worldwide income and gains, regardless of domicile.

The FIG regime

The Foreign Income and Gains (FIG) regime gives a four-year exemption to individuals who:

• become UK resident in the tax year, and
• were not UK resident in any of the ten tax years immediately preceding the year of arrival.

During the four FIG years, foreign income and gains are not charged to UK tax — whether or not they are remitted to the UK. This is broader than the old remittance basis: even sums brought to the UK are exempt.

After the four years (or immediately, for those who were UK resident in the prior ten years), the individual is taxed on worldwide income and gains on the arising basis.

Transitional provisions

Individuals who lost access to the remittance basis on 6 April 2025 benefit from:

• a 50% relief on foreign income for 2025-26, and
• a two-year temporary repatriation facility (TRF) allowing previously unremitted foreign income and gains to be brought to the UK at a 12% rate in 2025-26 and 2026-27.

The Statutory Residence Test

UK residence is determined by the SRT, which considers:

• whether you are automatically resident (for example, if you spend 183+ days in the UK, or work full-time in the UK),
• whether you are automatically non-resident, or
• the sufficient ties test for those in the mid-range — counting days in the UK against family, accommodation, work and 90-day ties.

The day-count thresholds reduce as ties increase, so an individual with a UK home and family may be resident after as few as 16 days, while one with no UK ties can spend up to 45 days without becoming resident.

Split-year treatment

Where someone arrives in or leaves the UK mid-year, split-year treatment can divide the year into a UK part and an overseas part, so that foreign income earned before arrival is not taxed in the UK. Eligibility depends on meeting one of the specific split-year cases (Cases 1-8).

Double taxation relief

The UK's network of double taxation treaties ensures the same income is not taxed twice. Treaty relief typically operates via the residence tie-breaker (the 'treaty residence' test) and credit or exemption methods. For relocating individuals, treaty residence is often the decisive question in the year of arrival.

Legislation

The SRT is in Finance Act 2013, Schedule 45. The abolition of the non-dom regime and the FIG regime were enacted in Finance (No. 2) Act 2024, taking effect from 6 April 2025. Double taxation relief is under TIOPA 2010 Part 2, with the UK's treaty network giving effect under international law.

Practical example

A US citizen moves to London in August 2026, having lived outside the UK for the previous twelve years. She qualifies for the FIG regime for 2026-27 through 2029-30. During those four years, her US dividend income, US bank interest and gains on US shares are not taxed in the UK, even if remitted. UK-source income (such as a UK salary) is taxed normally.

In 2030-31, her fifth year of residence, the FIG exemption ends and her worldwide income and gains are taxed in the UK on the arising basis — with credit for any US tax under the UK-US double taxation treaty.

Had she instead realised a large US share gain before becoming UK resident, that gain would fall outside UK tax entirely. Realising it after arrival but within the FIG window is also sheltered — but deferring it to year five would expose it to UK CGT at 18%/24%. This is why pre-arrival timing is so consequential.

Common mistakes

1. Assuming the remittance basis still exists. It does not — the FIG regime replaces it, with different (and stricter) eligibility based on ten years' non-residence.
2. Counting days loosely. Day-count under the SRT has specific rules (midnight in the UK, exceptional circumstances, transit). Miscalculation can accidentally create residence.
3. Overlooking split-year eligibility. Failing to claim split-year treatment can cause pre-arrival foreign income to be taxed in the UK in the year of arrival.
4. Bringing historic funds in without the TRF. Existing non-doms who remit pre-April-2025 funds after 6 April 2025 without using the temporary repatriation facility may face full UK tax rather than the 12% TRF rate.
5. Ignoring trust protections. The FIG regime includes protections for certain existing non-resident trusts, but the conditions are narrow and time-limited.

How Newshams can help

Newshams Tax Advisers advises internationally mobile individuals on the FIG regime, the statutory residence test, split-year treatment, double-tax treaty planning and pre-arrival structuring. We work alongside US tax advisers and other foreign counsel to coordinate cross-border compliance. Contact us on +44 (0) 800 211 8657 or enquiries@newshams.com.