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?

The 4-year foreign income and gains (FIG) regime replaced the remittance basis on 6 April 2025 (Finance Act 2025, Part 2). A UK resident can claim relief on eligible foreign income and gains for up to 4 tax years, but only within the first 4 years of UK residence following at least 10 consecutive tax years of non-residence. Key differences: (a) residence, not domicile - domicile no longer matters for Income Tax and CGT; (b) a hard 4-year window - the old remittance basis had no end date, though it cost £30,000 a year after 7 of the previous 9 years and £60,000 after 12 of 14, and was unavailable once deemed domiciled; (c) relief whether or not remitted - bringing the money to the UK does not trigger tax; (d) a claim on the Self Assessment return, source by source if you wish - and a claim costs the Personal Allowance and the CGT annual exempt amount for that year (plus Marriage Allowance, Married Couple's Allowance and Blind Person's Allowance where relevant). Foreign employment income is not covered by FIG; it may get Overseas Workday Relief instead. Arrivals whose 4-year period began before 6 April 2025 can use the years remaining from 2025-26.

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

TRF lets someone who used the remittance basis in any year before 2025-26 designate "qualifying overseas capital" - broadly, foreign income and gains that arose before 6 April 2025 and were not remitted - and pay a flat charge on it. Rates (Finance Act 2025 Sch 10 para 1): 12% on amounts designated in the 2025-26 or 2026-27 return, 15% in the 2027-28 return; no designations after that. You must be UK resident for the year of the designating return. Effect: once designated and charged, the amount can be brought to the UK without a further Income Tax or CGT charge on remittance. Weighing it up: compare the TRF rate with what a later remittance would cost at your marginal Income Tax or CGT rates, and the cash cost of paying now. The work is in the records: you need to be able to identify which pre-April 2025 income and gains, by year and source, sit in each account.

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

From 6 April 2025 Inheritance Tax scope on non-UK assets depends on long-term UK residence, not domicile. You are a long-term UK resident in a tax year if you were UK resident for at least 10 of the previous 20 tax years (IHTA 1984 s.6A). Long-term residents have worldwide assets within Inheritance Tax; others only UK assets. After you leave, the status lasts until you have been non-resident for a set number of consecutive years: 3 if you were resident for 13 or fewer of the previous 20 years, rising by one per extra year to 10 for 20 years of residence. A run of 10 consecutive non-resident years resets the test. Transitional rules: someone who was not UK domiciled or deemed domiciled on 30 October 2024, is non-resident in 2025-26 and does not return is not a long-term resident; someone who was deemed domiciled on that date, is non-resident in 2025-26 and does not return stops being one after 3 years. Comparison: the old deemed-domicile test used 15 of the previous 20 years, so the new test bites earlier.

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

What a claim costs: the Personal Allowance (£12,570) and the CGT annual exempt amount (£3,000) for that year. What that is worth depends on your income without the claim. The allowance tapers by £1 for every £2 of adjusted net income above £100,000, so at £125,140 or more it is already nil and a claim costs only the annual exempt amount (£540 at 18%, £720 at 24%). Below the taper the allowance is worth up to £5,028 to a higher-rate taxpayer. Note that foreign income you claim relief on still counts towards adjusted net income for the taper, Tax-Free Childcare and the High Income Child Benefit Charge (GOV.UK). Rule of thumb: small foreign income with UK income below £100,000 - usually not worth claiming; any material foreign income with UK income above the taper - usually worth it. The table on this page works four cases. Each year is a separate decision, and you can choose which sources to claim on.

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

Overseas Workday Relief covers employment income for duties performed outside the UK, for people eligible for the 4-year regime (employment income is outside FIG itself). It is claimed by election on the Self Assessment return. The relief is capped at the lesser of 30% of the qualifying employment income and £300,000 a year (ITEPA 2003 s.41R, inserted by Finance Act 2025). Unlike the pre-April 2025 version, it no longer depends on keeping the earnings offshore under the remittance basis. Worked example: £400,000 of qualifying employment income, with half the workdays abroad, gives £200,000 attributable to overseas duties; the cap is the lesser of 30% x £400,000 = £120,000 and £300,000, so £120,000 is relieved. Common pitfall: weak workday records. Keep a day-by-day log with travel evidence.

Q How are trusts treated under the new regime?

Income Tax and CGT: from 6 April 2025 the "protected settlement" shelter for offshore trusts set up by non-doms has gone. Income and gains of a settlor-interested trust are attributed to the settlor under the settlements and offshore trust rules (for example section 624 ITTOIA 2005 and section 86 TCGA 1992) unless the settlor is in their 4-year FIG period and claims relief. Inheritance Tax: overseas trust assets are within scope while the settlor is a long-term UK resident, including trusts set up before 6 April 2025. GOV.UK says no Inheritance Tax is due on the settlor's death on trust assets that were placed in the trust while the settlor was non-UK domiciled, were overseas on 30 October 2024, and were overseas at death or when the settlor's rights ended. Relevant property trusts in scope bear ten-year charges of up to 6% and exit charges when assets leave scope - including when the settlor stops being a long-term resident. Practical point: trustees should be told when the settlor's status changes, and existing structures need review.

Q How does FIG interact with double tax treaties?

FIG works alongside the UK's double taxation agreements. If you claim FIG relief, foreign income usually still bears any tax the source country charges (for example withholding tax on dividends), but no UK tax. If you do not claim, the UK taxes worldwide income and you claim foreign tax credit relief for foreign tax paid, up to the UK tax on the same income (TIOPA 2010 Part 2). Treaty residence: you can be UK resident under the Statutory Residence Test and also resident elsewhere; treaty tie-breakers (typically permanent home, then centre of vital interests, habitual abode and nationality, as in Article 4 of the OECD Model) decide which country has primary taxing rights. Inheritance Tax has a separate, much smaller treaty network, including a UK-US estate and gift tax treaty. Cross-border cases need advice in both countries.

Q What records and reporting are required?

Self Assessment is the vehicle for every claim: FIG relief, the OWR election and TRF designations are made in the return, using the residence pages (SA109) where relevant. Records to keep: (a) statements for each source of foreign income; (b) currency conversion records, applied consistently; (c) gain computations with cost, acquisition date and proceeds in sterling; (d) a workday calendar with evidence for OWR; (e) for TRF, the analysis of pre-6 April 2025 income and gains by year and source in each account; (f) trust deeds and accounts. How long: the self-employed must keep records for at least 5 years after the 31 January deadline for the year (GOV.UK); others at least 22 months after the end of the tax year. Keep TRF and mixed-fund analyses for as long as the funds exist, since they may need to be evidenced on a later remittance. Information exchange: under the Common Reporting Standard, HMRC receives account information about UK residents from overseas tax authorities. If an HMRC letter arrives, see /uk-hmrc-cop9-cdf-tax-fraud-disclosure-2026-27-guide.

Q Who should consider leaving the UK before becoming LTR?

The 10-year point: someone planning a temporary stay becomes a long-term UK resident once they have been resident for 10 of the previous 20 tax years. After that, worldwide assets are within Inheritance Tax at 40% above the available nil-rate bands, and the status persists after leaving for at least 3 years of non-residence (longer after 14 or more resident years, up to 10). Who is most affected: (a) people with substantial overseas estates; (b) US citizens, whose worldwide estate is already within US estate tax (a UK-US estate and gift tax treaty exists to relieve double charges); (c) returning UK nationals - a run of 10 consecutive non-resident years resets the test, otherwise earlier UK years still count. Timing: someone who arrives and leaves within 9 tax years never becomes a long-term resident; someone resident for 10 to 13 of the 20 years keeps the status for 3 years after leaving. Advice: a specialist private client adviser, ideally before year 8 or 9.

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

After the last designation year (2027-28), pre-6 April 2025 foreign income and gains that were not designated stay subject to the remittance rules: if brought to the UK, they are taxed at your rates for the year of remittance. Illustration: £500,000 of pre-2025 foreign income designated in a 2026-27 return costs 12% = £60,000; remitted later without designation it could be taxed at up to the 45% additional rate. Mixed funds: accounts mixing income, gains and capital, or several years, follow the ordering rules in section 809Q ITA 2007. Mixed-fund cleansing: people who had used the remittance basis in a year before 2017-18 (and were not born in the UK with a UK domicile of origin) could separate a mixed fund by nominated transfers made in 2017-18 or 2018-19 (Finance (No. 2) Act 2017, Schedule 8, paragraph 44). That window has closed. Action: (1) analyse pre-April 2025 reserves by year and source; (2) compare the TRF charge with the cost of later remittance; (3) make any designation by the 2027-28 return; (4) keep the evidence.

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

The Statutory Residence Test decides each year's residence, so it decides FIG eligibility: you need 10 consecutive non-resident years before the first year of UK residence. The tests (HMRC RDR3): (1) automatic overseas tests - for example fewer than 16 days in the UK if resident in any of the previous 3 years, or fewer than 46 days if not; (2) automatic UK tests - 183 days or more, a UK home for at least 91 consecutive days (30 in the year) with no overseas home or fewer than 30 days in one, or full-time UK work; (3) the sufficient ties test - days in the UK against family, accommodation, work (40 days of more than 3 hours), 90-day and, for leavers, country ties. Split years: the year of arrival counts as a UK-resident year, so it is year 1 of the 4. Temporary absence: a non-resident year inside the 4-year period cannot be claimed and is not rolled forward (GOV.UK). Second use: after another 10 consecutive non-resident years, a new 4-year period is available.