UK Domicile + FIG + TRF: 2026/27

UK Domicile + FIG + TRF Deep-Dive 2026/27: Operational Guide

Q: What is the FIG regime and how does it differ from the old non-dom remittance basis?

FIG (Foreign Income and Gains) regime : from 6 April 2025, replaces the centuries-old non-dom remittance basis. Provides 4-year UK Income Tax + CGT exemption on foreign source income and gains for individuals who were non-UK resident for the 10 consecutive tax years preceding arrival. Key changes from remittance basis : (a) Residence-based not domicile-based - your domicile (UK common-law domicile, deemed-domicile, born-domicile etc.) is irrelevant for IT + CGT from April 2025; (b) Hard 4-year limit - exemption ends absolutely after 4 years regardless of remittance behaviour, vs old remittance basis available indefinitely (with rising Remittance Basis Charge at 7/12/15 year intervals); (c) Full exemption - foreign income + gains in the 4-year window are exempt even if remitted to UK, vs old basis where remittance triggered tax; (d) Annual election required via Self Assessment - forfeits Personal Allowance + CGT AEA for that year. Statutory basis: Finance (No. 2) Act 2024 Schedule 5. Who benefits most : new UK arrivers with high-value foreign income/gains in early years - executives on international assignment, returning UK nationals after long absence, families relocating to UK for limited period.

Q: How does the TRF (Temporary Repatriation Facility) work?

TRF : 3-year transitional window allowing pre-April-2025 unremitted foreign income + gains (accumulated under the old remittance basis) to be designated for repatriation at a flat reduced tax rate. Timeline + rates : 2025/26 = 12%; 2026/27 = 12%; 2027/28 = 15%; facility CLOSED from 6 April 2028. Tranche designation mechanism : taxpayer identifies specific pots of pre-April-2025 unremitted reserves; designates the chosen amount + tax type on Self Assessment return; pays flat rate on designated tranche. Designated tranches can be freely remitted thereafter with no further UK tax. Irreversible : once designated + tax paid, decision cannot be unwound. Strategic considerations : (a) compare TRF rate (12%/15%) against the IT/CGT that would apply on later remittance (potentially 45% IT or 24% CGT); (b) consider opportunity cost of paying tax now vs investing the tax money; (c) for inheritance planning - designated TRF amounts can be passed to next generation without further UK tax. HMRC modelling : ~£15bn of TRF receipts expected over 3-year window. Common error : failing to identify designatable pots accurately - need precise records of pre-April-2025 unremitted FIG by tax year + source.

Q: What is the 10-of-20 IHT long-term resident rule?

Residence-based IHT scope from 6 April 2025 replaces the deemed-domicile rule. Individual becomes "Long-Term Resident" (LTR) when UK-resident for 10 of the last 20 tax years (tested annually). LTR triggers WORLDWIDE IHT scope (vs UK-only assets for non-LTRs). Practical implications : an internationally-mobile individual who lived in UK 2015-2024 (10 years), left UK 2024, is still LTR for 2025/26 even though departed. 10-year departure tail : LTR status PERSISTS for 10 years after leaving UK. Death within 10 years of departure = worldwide UK IHT scope still applies. Tapered: years 1-3 post-departure = 100% scope; year 4 = 80%; year 5 = 60%; year 6 = 40%; year 7+ = 20%; year 11+ = 0%. Comparison with old deemed-domicile : old rule = 15 of last 20 years triggered deemed-dom + worldwide IHT. New rule = 10 of last 20 = significantly EARLIER trigger. Estimated 15,000+ additional families brought into worldwide IHT scope. Planning implications : (a) departures before reaching year 10 of residence avoid LTR status entirely; (b) families intending to settle long-term should structure assets BEFORE reaching LTR threshold (foundations, life policies in non-UK trust, etc.); (c) post-LTR-trigger pre-departure planning becomes harder due to 10-year tail.

Q: What is the trade-off when electing for FIG exemption?

Election cost : forfeiture of Personal Allowance (£12,570) AND CGT Annual Exempt Amount (£3,000) for the year of election. Math comparison : Cost of PA loss = PA × marginal rate. For 40% taxpayer: £12,570 × 40% = £5028. For 45% taxpayer: £5657. Cost of AEA loss : £3,000 × 24% = £720 (residential gains) or £540 (other gains). Benefit from election : full UK tax saved on foreign income + gains. Worked example for 45% taxpayer with £200k foreign income: election saves £200k × 45% = £90k; cost £5657 + £720; net saving ~£83624. Break-even foreign income : PA cost £5657 ÷ 45% = £12,570 foreign income equivalent. Any foreign income above ~£12,570 = election worth electing. Don't elect when foreign income is minimal relative to UK income, where PA loss exceeds the foreign tax saving. Annual decision : each year independently - elect in one year, not the next. Tipping mid-year : cannot pro-rata - election covers ENTIRE tax year.

Q: What is OWR (Overseas Workdays Relief) under the new regime?

OWR (Overseas Workdays Relief) : separate relief for employment income from foreign workdays for UK-resident employees with overseas employer. Available alongside FIG : OWR applies to overseas EMPLOYMENT income, FIG applies to other foreign income + gains. 4-year window : matches FIG 4-year window. Same qualifying condition (10-year prior non-residence). NEW £300,000 cap : from 6 April 2025, OWR is CAPPED at the LOWER of £300,000 or 30% of total employment income for the year. Pre-April-2025 OWR was uncapped and combined with remittance basis. Mechanism : identify days physically worked abroad as a proportion of total workdays. Apply ratio to employment income. Excluded amount = OWR-relieved. Worked example : £400k employment income; 100 of 200 workdays abroad = 50% non-UK days; ratio £200k; capped at min(£300,000, 30% × £400k = £120k) = £120k relieved. Designated bank account : amounts qualifying for OWR must be paid into a "qualifying account" (typically offshore bank account designated on Self Assessment) to preserve the relief. Funds in qualifying accounts remain UK-tax-free; transfers to non-qualifying accounts trigger immediate UK tax. Common pitfall : misallocating UK vs non-UK workdays - HMRC scrutinises travel records carefully.

Q: How are trusts treated under the new regime?

Protected Settlement abolition : from 6 April 2025, the "Protected Settlement" regime that allowed non-doms to settle offshore trusts with full tax shelter is largely abolished. Impact : trusts settled by individuals who become FIG-ineligible (i.e., either reach 4 years UK residence OR exceeded 10y prior residence) are now subject to: (a) full IHT exit + periodic 10-yearly 6% charge on assets held in trust; (b) full IT charges on settlor under Section 624 ITTOIA 2005 attribution rules; (c) full CGT charges under Section 86 + Schedule 5 TCGA 1992 attribution rules. Grandfathering : limited preservation of pre-April-2025 trusts - assets in trust at 5 April 2025 retain some protection but additions / changes void protection. Settlor changes residence status = protected status may be reset. Excluded property trusts : trusts holding only non-UK situs assets settled by non-LTR settlor remain outside UK IHT scope on settlor's death. But once settlor becomes LTR, all trust assets become potentially within UK IHT scope. 10-year periodic charge : trusts within IHT scope pay 6% periodic charge every 10 years on value exceeding NRB. Significant ongoing tax burden. Planning implications : pre-April-2025 settled trusts need urgent review. Late-arriving non-doms should NOT settle new trusts during 4-year FIG window unless very confident of departure before year 10.

Q: How does FIG interact with double tax treaties?

UK treaty network : 130+ bilateral double tax treaties allocate taxing rights between countries. FIG regime works WITHIN the UK treaty framework, not outside it. For FIG-electing taxpayer : most treaties allocate primary taxing rights to RESIDENCE country (i.e., UK) for foreign income earned by UK residents. FIG exemption removes UK tax. Other country may still apply withholding (e.g., 15% dividend WHT in source country). Net effect: foreign-source income suffers only foreign WHT, not UK tax. For non-FIG-electing taxpayer (arising basis) : UK taxes worldwide income. Foreign Tax Credit (Section 18 + Schedule 4 TIOPA 2010) reduces UK tax by foreign tax paid up to UK rate cap. Treaty residence tiebreaker : SRT-residence vs treaty-residence can differ. Treaty tiebreakers typically rest on permanent home → centre of vital interests → habitual abode → nationality (Article 4 OECD Model). Individual UK-tax-resident under SRT may be treaty-resident elsewhere - resulting in primary taxing rights to other country. Specific issues : US estate tax + UK IHT interaction for LTR individuals (no UK-US double IHT treaty, only limited credit); France wealth tax (IFI) on UK-resident French nationals; Italian flat tax regime competing with UK FIG. Practical advice : cross-border tax requires both UK + foreign tax adviser. UK-only advice on FIG election can miss treaty implications.

Q: What records and reporting are required?

Self Assessment annual filing remains the cornerstone. FIG election : tick-box election on SA110 (Residence, remittance basis etc.) supplementary pages. TRF designation : form within SA covering source/year/amount of designated tranche + rate paid. OWR claim : SA101 employment pages with workday breakdown + qualifying account details. Records to maintain : (a) all foreign source income invoices/dividend statements/bank statements; (b) currency conversion records at HMRC official rates (or commercial rates with consistency); (c) capital gains computations including original cost basis, acquisition date, disposal proceeds, all in GBP using closing-day rates; (d) workday calendar with locations + supporting evidence (boarding passes, hotel bookings) for OWR claims; (e) bank statements for "qualifying accounts" showing FIG / OWR preserved status; (f) trust deeds + trust accounts for all trusts settled / benefited from. Retention period : 6 years standard (Section 12B TMA 1970), 20 years for deliberate or careless errors. For LTR + 10-year IHT tail, records relevant to estate must be kept indefinitely. HMRC reporting : nudge letters increasingly common for non-doms post-April-2025. CRS (Common Reporting Standard) provides HMRC with automatic data from 100+ countries on UK-resident bank accounts, investments, trust interests. Don't ignore nudges : see /uk-hmrc-cop9-cdf-tax-fraud-disclosure-2026-27-guide for response strategy.

Q: Who should consider leaving the UK before becoming LTR?

The 10-year window : individuals planning to be UK-resident temporarily should consider departure BEFORE reaching 10 years of UK residence in any rolling 20-year window. Beyond year 10 : triggers LTR status + worldwide IHT scope + 10-year departure tail. Who especially affected : (a) high-net-worth foreign nationals with substantial overseas estates - LTR brings entire estate into UK IHT (40% above NRB/RNRB); (b) US nationals - already worldwide US estate tax; LTR adds UK IHT on top with limited treaty relief; (c) UK nationals returning after 10+ years abroad - retain LTR status from earlier UK residence period unless gap was sufficient. Year 7-9 planning : many advisers now recommend "year 7 review" for international clients. Decide: extend stay + accept LTR + structure for IHT (life insurance, gift planning, pension consolidation, family company restructuring); OR depart before year 10 + preserve non-LTR status. The 10-year tail makes departure timing critical : leaving in year 9 = LTR avoided. Leaving in year 11 = LTR for next 10 years post-departure regardless. Practical considerations : business obligations, family education plans, healthcare access, settled status / ILR considerations. Professional advice essential : STEP-qualified or specialist private client solicitors / Big 4 firms.

Q: What about pre-April-2025 unremitted offshore reserves not designated under TRF?

Default position post-April-2028 : pre-April-2025 unremitted foreign income + gains that were NOT designated under TRF before 5 April 2028 revert to STANDARD UK TAX treatment on remittance to UK. Practical impact : a pre-April-2025 unremitted dividend pot of £500k. Designated under TRF in 2026/27 = £60k flat tax (12%). Not designated, remitted in 2030 = potentially £225k tax (45% additional rate) + interest if not properly reported. Identification challenge : HMRC requires precise records of pre-April-2025 FIG by tax year + source. Mixed funds (combining pre + post 2025 income, or different income sources) attract Section 809Q ITA 2007 ordering rules + recent CIOT guidance on "cleansed" accounts. Clean Mixed Fund (CMF) elections : pre-2025 rule allowed certain mixed accounts to be "cleansed" via written election + segregation. This window was open 6 April 2017 - 5 April 2019 (Section 809RA ITA 2007). Some non-doms didn't use it - the missed cleansing opportunity now compounds the TRF planning urgency. Inheritance scenario : undesignated unremitted FIG inherited by next generation = full IT/CGT on remittance at beneficiary's marginal rate (not deceased's). Action items for current non-doms : (1) complete reconciliation of pre-April-2025 unremitted reserves by 6 April 2026 latest; (2) calculate TRF designation savings vs deferring remittance; (3) implement TRF designation strategy across 3-year window; (4) document remittance/non-remittance position with audit-grade evidence.

Operational deep-dive on the UK FIG (Foreign Income and Gains) regime, TRF (Temporary Repatriation Facility), and the LTR (Long-Term Resident) IHT rule for 2026/27. 4-year FIG exemption mechanics + 10-year prior-non-residence test. TRF 12%/12%/15% tranche designation by year 2025/26 to 2027/28. IHT 10-of-20 long-term resident trigger + 10-year departure tail with taper schedule. OWR (Overseas Workdays Relief) 4-year window + £300,000 cap + designated account mechanics. Protected Settlement abolition impact on offshore trusts. Election trade-off math (PA + AEA forfeiture vs foreign tax saved). Double tax treaty integration. Statutory Residence Test interaction. Pre-April-2025 unremitted reserve management. Statute - Finance (No. 2) Act 2024 Schedule 5.

2026/27 FIG / TRF / LTR at a glance

FIG exemption

4 years

From first UK residence year

TRF Y1-2

12%

2025/26 + 2026/27 designations

LTR trigger

10 of 20 years

Worldwide IHT scope

IHT tail

10 years

After departure, tapered

FIG election trade-off scenarios

Scenario	UK income	Foreign income	Foreign gains	Elect FIG?	Notes
Year 1 new arriver: £80k UK + £200k foreign income	£80,000	£200,000	£0	Yes	Election covers foreign £200k entirely. Cost: lose £12,570 PA worth £5,028 (40% band) - but saves 40%/45% on £200k = £80-90k tax.
Year 1 new arriver: £50k UK + £40k foreign + £100k gains	£50,000	£40,000	£100,000	Yes	Foreign income £40k taxed-saved + £100k gains tax-saved. Lose PA (£2,514) + AEA (£720). Net saving £20k+.
Year 1 new arriver: £150k UK + £8k foreign only	£150,000	£8,000	£0	No	Foreign income too small. Lose PA (£5,650) > saved tax on £8k @ 45% = £3,600. NO election - taxed on arising basis.
Long-term resident (11y), £200k foreign	£80,000	£200,000	£0	No	Not eligible for FIG (more than 10y UK residence in last 10y). Taxed on arising basis. TRF available for PRE-April-2025 reserves only.

Break-even: foreign income above ~£12,570 (PA value at 45% marginal rate) makes FIG election worthwhile. Below that, the PA + AEA forfeiture exceeds the foreign tax saving.

TRF 3-year designation timeline

Tax year	Designation rate	Status	Notes
2025/26	12%	Open	First TRF year. 12% rate on designated tranches. Strongest incentive period. Tranche designation made on SA return.
2026/27	12%	Open	12% rate continues. Many late-deciding taxpayers designate this year as planning crystallises.
2027/28	15%	Final year	15% rate. Step-up designed to push remaining designations through before facility closes.
2028/29+	-	CLOSED	No further TRF designations possible. Remaining pre-April-2025 unremitted reserves revert to standard UK tax on remittance.

IHT regime - residence-based replacement of deemed domicile

Pre-April 2025 basis

Domicile-based. Deemed UK-domiciled if UK-resident 15 of last 20 tax years, or UK-domiciled at common law.

From 6 April 2025

Residence-based. "Long-Term Resident" if UK-resident 10 of last 20 tax years. Triggers worldwide IHT scope (currently only UK assets for non-LTRs).

IHT tail (departure)

10-year LTR status persists after leaving UK - meaning post-departure deaths within 10 years still subject to worldwide UK IHT. Tapers down: 100% for years 1-3 of departure, then 80%/60%/40%/20% for years 4/5/6/7+.

Trust treatment

Protected Settlement regime abolished from 6 April 2025. Trusts settled by deemed-doms / pre-April-2025 non-doms now subject to full IHT exit/periodic charges (6% per 10y) on assets that would have been excluded under old rules. Grandfathering for pre-2025 trusts limited.

Post-departure IHT tail schedule

LTR status persists for 10 years after leaving UK. Death within this window = worldwide UK IHT scope applies (tapered). Even leaving the UK doesn't immediately remove the tax burden for long-term residents.

Years post-departure	Worldwide IHT scope
Years 1-3	100%
Year 4	80%
Year 5	60%
Year 6	40%
Years 7-10	20%
Year 11+	0% (UK assets only)

Frequently asked questions

What is the FIG regime and how does it differ from the old non-dom remittance basis?

FIG (Foreign Income and Gains) regime: from 6 April 2025, replaces the centuries-old non-dom remittance basis. Provides 4-year UK Income Tax + CGT exemption on foreign source income and gains for individuals who were non-UK resident for the 10 consecutive tax years preceding arrival. Key changes from remittance basis: (a) Residence-based not domicile-based - your domicile (UK common-law domicile, deemed-domicile, born-domicile etc.) is irrelevant for IT + CGT from April 2025; (b) Hard 4-year limit - exemption ends absolutely after 4 years regardless of remittance behaviour, vs old remittance basis available indefinitely (with rising Remittance Basis Charge at 7/12/15 year intervals); (c) Full exemption - foreign income + gains in the 4-year window are exempt even if remitted to UK, vs old basis where remittance triggered tax; (d) Annual election required via Self Assessment - forfeits Personal Allowance + CGT AEA for that year. Statutory basis: Finance (No. 2) Act 2024 Schedule 5. Who benefits most: new UK arrivers with high-value foreign income/gains in early years - executives on international assignment, returning UK nationals after long absence, families relocating to UK for limited period.

How does the TRF (Temporary Repatriation Facility) work?

TRF: 3-year transitional window allowing pre-April-2025 unremitted foreign income + gains (accumulated under the old remittance basis) to be designated for repatriation at a flat reduced tax rate. Timeline + rates: 2025/26 = 12%; 2026/27 = 12%; 2027/28 = 15%; facility CLOSED from 6 April 2028. Tranche designation mechanism: taxpayer identifies specific pots of pre-April-2025 unremitted reserves; designates the chosen amount + tax type on Self Assessment return; pays flat rate on designated tranche. Designated tranches can be freely remitted thereafter with no further UK tax. Irreversible: once designated + tax paid, decision cannot be unwound. Strategic considerations: (a) compare TRF rate (12%/15%) against the IT/CGT that would apply on later remittance (potentially 45% IT or 24% CGT); (b) consider opportunity cost of paying tax now vs investing the tax money; (c) for inheritance planning - designated TRF amounts can be passed to next generation without further UK tax. HMRC modelling: ~£15bn of TRF receipts expected over 3-year window. Common error: failing to identify designatable pots accurately - need precise records of pre-April-2025 unremitted FIG by tax year + source.

What is the 10-of-20 IHT long-term resident rule?

Residence-based IHT scope from 6 April 2025 replaces the deemed-domicile rule. Individual becomes "Long-Term Resident" (LTR) when UK-resident for 10 of the last 20 tax years (tested annually). LTR triggers WORLDWIDE IHT scope (vs UK-only assets for non-LTRs). Practical implications: an internationally-mobile individual who lived in UK 2015-2024 (10 years), left UK 2024, is still LTR for 2025/26 even though departed. 10-year departure tail: LTR status PERSISTS for 10 years after leaving UK. Death within 10 years of departure = worldwide UK IHT scope still applies. Tapered: years 1-3 post-departure = 100% scope; year 4 = 80%; year 5 = 60%; year 6 = 40%; year 7+ = 20%; year 11+ = 0%. Comparison with old deemed-domicile: old rule = 15 of last 20 years triggered deemed-dom + worldwide IHT. New rule = 10 of last 20 = significantly EARLIER trigger. Estimated 15,000+ additional families brought into worldwide IHT scope. Planning implications: (a) departures before reaching year 10 of residence avoid LTR status entirely; (b) families intending to settle long-term should structure assets BEFORE reaching LTR threshold (foundations, life policies in non-UK trust, etc.); (c) post-LTR-trigger pre-departure planning becomes harder due to 10-year tail.

What is the trade-off when electing for FIG exemption?

Election cost: forfeiture of Personal Allowance (£12,570) AND CGT Annual Exempt Amount (£3,000) for the year of election. Math comparison: Cost of PA loss = PA × marginal rate. For 40% taxpayer: £12,570 × 40% = £5028. For 45% taxpayer: £5657. Cost of AEA loss: £3,000 × 24% = £720 (residential gains) or £540 (other gains). Benefit from election: full UK tax saved on foreign income + gains. Worked example for 45% taxpayer with £200k foreign income: election saves £200k × 45% = £90k; cost £5657 + £720; net saving ~£83624. Break-even foreign income: PA cost £5657 ÷ 45% = £12,570 foreign income equivalent. Any foreign income above ~£12,570 = election worth electing. Don't elect when foreign income is minimal relative to UK income, where PA loss exceeds the foreign tax saving. Annual decision: each year independently - elect in one year, not the next. Tipping mid-year: cannot pro-rata - election covers ENTIRE tax year.

What is OWR (Overseas Workdays Relief) under the new regime?

OWR (Overseas Workdays Relief): separate relief for employment income from foreign workdays for UK-resident employees with overseas employer. Available alongside FIG: OWR applies to overseas EMPLOYMENT income, FIG applies to other foreign income + gains. 4-year window: matches FIG 4-year window. Same qualifying condition (10-year prior non-residence). NEW £300,000 cap: from 6 April 2025, OWR is CAPPED at the LOWER of £300,000 or 30% of total employment income for the year. Pre-April-2025 OWR was uncapped and combined with remittance basis. Mechanism: identify days physically worked abroad as a proportion of total workdays. Apply ratio to employment income. Excluded amount = OWR-relieved. Worked example: £400k employment income; 100 of 200 workdays abroad = 50% non-UK days; ratio £200k; capped at min(£300,000, 30% × £400k = £120k) = £120k relieved. Designated bank account: amounts qualifying for OWR must be paid into a "qualifying account" (typically offshore bank account designated on Self Assessment) to preserve the relief. Funds in qualifying accounts remain UK-tax-free; transfers to non-qualifying accounts trigger immediate UK tax. Common pitfall: misallocating UK vs non-UK workdays - HMRC scrutinises travel records carefully.

How are trusts treated under the new regime?

Protected Settlement abolition: from 6 April 2025, the "Protected Settlement" regime that allowed non-doms to settle offshore trusts with full tax shelter is largely abolished. Impact: trusts settled by individuals who become FIG-ineligible (i.e., either reach 4 years UK residence OR exceeded 10y prior residence) are now subject to: (a) full IHT exit + periodic 10-yearly 6% charge on assets held in trust; (b) full IT charges on settlor under Section 624 ITTOIA 2005 attribution rules; (c) full CGT charges under Section 86 + Schedule 5 TCGA 1992 attribution rules. Grandfathering: limited preservation of pre-April-2025 trusts - assets in trust at 5 April 2025 retain some protection but additions / changes void protection. Settlor changes residence status = protected status may be reset. Excluded property trusts: trusts holding only non-UK situs assets settled by non-LTR settlor remain outside UK IHT scope on settlor's death. But once settlor becomes LTR, all trust assets become potentially within UK IHT scope. 10-year periodic charge: trusts within IHT scope pay 6% periodic charge every 10 years on value exceeding NRB. Significant ongoing tax burden. Planning implications: pre-April-2025 settled trusts need urgent review. Late-arriving non-doms should NOT settle new trusts during 4-year FIG window unless very confident of departure before year 10.

How does FIG interact with double tax treaties?

UK treaty network: 130+ bilateral double tax treaties allocate taxing rights between countries. FIG regime works WITHIN the UK treaty framework, not outside it. For FIG-electing taxpayer: most treaties allocate primary taxing rights to RESIDENCE country (i.e., UK) for foreign income earned by UK residents. FIG exemption removes UK tax. Other country may still apply withholding (e.g., 15% dividend WHT in source country). Net effect: foreign-source income suffers only foreign WHT, not UK tax. For non-FIG-electing taxpayer (arising basis): UK taxes worldwide income. Foreign Tax Credit (Section 18 + Schedule 4 TIOPA 2010) reduces UK tax by foreign tax paid up to UK rate cap. Treaty residence tiebreaker: SRT-residence vs treaty-residence can differ. Treaty tiebreakers typically rest on permanent home → centre of vital interests → habitual abode → nationality (Article 4 OECD Model). Individual UK-tax-resident under SRT may be treaty-resident elsewhere - resulting in primary taxing rights to other country. Specific issues: US estate tax + UK IHT interaction for LTR individuals (no UK-US double IHT treaty, only limited credit); France wealth tax (IFI) on UK-resident French nationals; Italian flat tax regime competing with UK FIG. Practical advice: cross-border tax requires both UK + foreign tax adviser. UK-only advice on FIG election can miss treaty implications.

What records and reporting are required?

Self Assessment annual filing remains the cornerstone. FIG election: tick-box election on SA110 (Residence, remittance basis etc.) supplementary pages. TRF designation: form within SA covering source/year/amount of designated tranche + rate paid. OWR claim: SA101 employment pages with workday breakdown + qualifying account details. Records to maintain: (a) all foreign source income invoices/dividend statements/bank statements; (b) currency conversion records at HMRC official rates (or commercial rates with consistency); (c) capital gains computations including original cost basis, acquisition date, disposal proceeds, all in GBP using closing-day rates; (d) workday calendar with locations + supporting evidence (boarding passes, hotel bookings) for OWR claims; (e) bank statements for "qualifying accounts" showing FIG / OWR preserved status; (f) trust deeds + trust accounts for all trusts settled / benefited from. Retention period: 6 years standard (Section 12B TMA 1970), 20 years for deliberate or careless errors. For LTR + 10-year IHT tail, records relevant to estate must be kept indefinitely. HMRC reporting: nudge letters increasingly common for non-doms post-April-2025. CRS (Common Reporting Standard) provides HMRC with automatic data from 100+ countries on UK-resident bank accounts, investments, trust interests. Don't ignore nudges: see /uk-hmrc-cop9-cdf-tax-fraud-disclosure-2026-27-guide for response strategy.

Who should consider leaving the UK before becoming LTR?

The 10-year window: individuals planning to be UK-resident temporarily should consider departure BEFORE reaching 10 years of UK residence in any rolling 20-year window. Beyond year 10: triggers LTR status + worldwide IHT scope + 10-year departure tail. Who especially affected: (a) high-net-worth foreign nationals with substantial overseas estates - LTR brings entire estate into UK IHT (40% above NRB/RNRB); (b) US nationals - already worldwide US estate tax; LTR adds UK IHT on top with limited treaty relief; (c) UK nationals returning after 10+ years abroad - retain LTR status from earlier UK residence period unless gap was sufficient. Year 7-9 planning: many advisers now recommend "year 7 review" for international clients. Decide: extend stay + accept LTR + structure for IHT (life insurance, gift planning, pension consolidation, family company restructuring); OR depart before year 10 + preserve non-LTR status. The 10-year tail makes departure timing critical: leaving in year 9 = LTR avoided. Leaving in year 11 = LTR for next 10 years post-departure regardless. Practical considerations: business obligations, family education plans, healthcare access, settled status / ILR considerations. Professional advice essential: STEP-qualified or specialist private client solicitors / Big 4 firms.

What about pre-April-2025 unremitted offshore reserves not designated under TRF?

Default position post-April-2028: pre-April-2025 unremitted foreign income + gains that were NOT designated under TRF before 5 April 2028 revert to STANDARD UK TAX treatment on remittance to UK. Practical impact: a pre-April-2025 unremitted dividend pot of £500k. Designated under TRF in 2026/27 = £60k flat tax (12%). Not designated, remitted in 2030 = potentially £225k tax (45% additional rate) + interest if not properly reported. Identification challenge: HMRC requires precise records of pre-April-2025 FIG by tax year + source. Mixed funds (combining pre + post 2025 income, or different income sources) attract Section 809Q ITA 2007 ordering rules + recent CIOT guidance on "cleansed" accounts. Clean Mixed Fund (CMF) elections: pre-2025 rule allowed certain mixed accounts to be "cleansed" via written election + segregation. This window was open 6 April 2017 - 5 April 2019 (Section 809RA ITA 2007). Some non-doms didn't use it - the missed cleansing opportunity now compounds the TRF planning urgency. Inheritance scenario: undesignated unremitted FIG inherited by next generation = full IT/CGT on remittance at beneficiary's marginal rate (not deceased's). Action items for current non-doms: (1) complete reconciliation of pre-April-2025 unremitted reserves by 6 April 2026 latest; (2) calculate TRF designation savings vs deferring remittance; (3) implement TRF designation strategy across 3-year window; (4) document remittance/non-remittance position with audit-grade evidence.

How does the FIG regime interact with the Statutory Residence Test?

SRT determines UK residence - foundational for FIG eligibility. The 10-year qualifying condition is tested under SRT each year. Three SRT test types: (1) Automatic Overseas Tests - if any apply = non-UK-resident automatically (e.g., < 16 days UK = non-resident); (2) Automatic UK Tests - if any apply = UK-resident automatically (e.g., > 182 days UK = resident, or only home in UK > 91 days); (3) Sufficient Ties Test - resident if days + ties combination exceeds threshold. For FIG-eligibility: need NON-RESIDENT under SRT for each of last 10 years. Even ONE year of UK residence in the window disqualifies. Split year treatment: arrival/departure year can be split into UK-resident + non-resident periods. FIG eligibility tested on full-year UK residence status (split-year doesn't preserve eligibility - arriving mid-year via split-year still uses up year 1 of FIG window). Key SRT ties for assessment: family tie (UK-resident spouse/minor child), accommodation tie (available home + used at least once), work tie (40+ UK workdays), 90-day tie (90+ days in prior 2 years), country tie (more days in UK than any other - applies for "leavers" only). FIG window expiry: 4 years from first UK residence year (not first arrival - timing matters for split-year arrivers). Re-qualification after departure: if non-UK resident again for 10 consecutive years, FIG eligibility resets - new arrival qualifies for new 4-year window. Theoretically possible to use FIG twice in a lifetime with 10+ years intervening.

What is the long-term impact on UK competitiveness for international talent?

2024 OBR forecast: net Exchequer gain ~£2.7bn/yr by 2028/29 from FIG regime + LTR IHT rule. Behavioural response forecast: 17,000 wealthy individuals projected to depart UK over 2025-2028. Industry estimates from STEP, CIOT, Tax Foundation Europe: actual departures may be higher - 25,000-35,000 range. Competing regimes: Italy (€100k/yr flat tax for new residents, 15-year window); Portugal (Non-Habitual Resident regime restored 2024 - 10-year flat 10% income); Greece (€100k/yr flat tax for 15 years); Spain (Beckham Law - 24% flat IT for 6 years for new arrivers); Switzerland (lump-sum taxation - cantonally variable, typically CHF 200-400k/yr); UAE / Monaco (no income tax). Sectors most affected: financial services / hedge funds / family offices / international executives / sports figures (especially footballers). City of London response: Lord Mayor + LSE estimate £15bn+ annual capital outflow risk. Government response: Treasury reviewing FIG terms post-2024 election - Conservative manifesto proposed extending FIG window to 6 years; Labour government held line at 4 years with TRF as transitional sweetener. Future flex: industry expects partial reversals if revenue / behavioural data shows greater-than-expected departures. For individuals already in UK: cannot rely on future policy reversals - plan based on current law. Consider Italy / Portugal / Switzerland transition route if returning to remittance-basis-style benefits is important.