UK Non-Dom FIG Regime 2026/27: 4-Year Relief, TRF, IHT Long-Term Residence
How the 4-year foreign income and gains regime, the Temporary Repatriation Facility and the IHT long-term residence test work in 2026/27.
From 6 April 2025 the remittance basis ended and domicile stopped deciding how foreign income, gains and overseas assets are taxed. Three rules replaced it: the 4-year foreign income and gains (FIG) regime for new arrivals, a 3-year Temporary Repatriation Facility (TRF) for former remittance basis users, and a residence-based Inheritance Tax test. This guide sets out each rule as HMRC publishes it for 2026/27. It is general information, not advice.
What changed on 6 April 2025
Finance Act 2025, Part 2, removed the remittance basis after 2024/25 (s.40) and replaced it with relief for qualifying new residents (ss.37 to 39), the TRF (s.41 and Schedule 10) and a long-term residence test for Inheritance Tax (s.44). Before 6 April 2025 a UK resident who was not domiciled in the UK could claim to be taxed on foreign income and gains only when they were brought to the UK. That option no longer exists: a UK resident is taxed on worldwide income and gains as they arise, unless the FIG regime or Overseas Workday Relief applies.
The 4-year FIG regime
| Point | Rule (gov.uk) |
|---|---|
| Who qualifies | A UK tax resident under the statutory residence test who is within their first 4 tax years of UK residence, following at least 10 consecutive tax years of non-UK residence. |
| Residence started before 6 April 2025 | The regime can be used from 2025/26 up to the last year of the original 4-year period. Someone resident from 2022/23 gets only 2025/26 (gov.uk worked example). |
| Temporary non-residence | No claim for a year in which you are non-resident; the remaining years of the 4 can be claimed on return. Unused years cannot be rolled forward past the 4 consecutive years. |
| What can be relieved | Foreign income and gains such as profits of a trade carried on wholly outside the UK, an overseas property business, dividends from non-UK companies, foreign interest and foreign capital gains. |
| What cannot | Foreign earnings and foreign specific employment income. These fall under Overseas Workday Relief instead. UK-source income and gains are taxed as normal. |
| How to claim | On the Self Assessment return. You choose which sources to claim on; you do not have to claim on every source. |
| Cost of claiming | You lose the Income Tax Personal Allowance and the CGT annual exempt amount for that year, plus Married Couple's Allowance, Marriage Allowance and Blind Person's Allowance if you would otherwise get them. |
| Adjusted net income | Claimed foreign income still counts towards adjusted net income, so it affects Tax-Free Childcare, free childcare entitlement and the High Income Child Benefit Charge. |
Employment income is separate. Salary for duties performed abroad is not relieved by the FIG regime. A qualifying new resident can elect for Overseas Workday Relief in up to 4 tax years, with relief capped at the lower of 30% of qualifying employment income or £300,000 for each qualifying year. An OWR election also loses the Personal Allowance and annual exempt amount for that year.
Double taxation. Where you claim the FIG regime on a source, there is no UK tax on that income for foreign tax to be credited against, so any foreign withholding tax stays as a cost. Leaving a source out of the claim keeps the normal foreign tax credit position, which is one reason to choose sources individually.
The Temporary Repatriation Facility (TRF)
The TRF is available only to individuals who are UK resident in the year of designation, have been subject to the remittance basis for at least one tax year, and hold "qualifying overseas capital": broadly, foreign income and gains that arose in 2024/25 or earlier while they were on the remittance basis, amounts of uncertain origin held overseas, and certain trust distributions and capital payments received in 2025/26 to 2027/28 that are matched to pre-April-2025 income or gains (RDRM73200, RDRM72100).
| Return in which the designation is made | TRF charge |
|---|---|
| 2025/26 | 12% |
| 2026/27 | 12% |
| 2027/28 | 15% |
Rates per HMRC RDRM73400. The TRF is not available after 2027/28. As arithmetic only: designating £500,000 in a 2026/27 return gives a charge of £60,000; the same designation in a 2027/28 return would be £75,000.
- No need to remit. The designated amount does not have to be brought to the UK during the TRF period to get the rate.
- Made in the return. A designation goes in the Self Assessment return and is treated as made at the start of that tax year.
- Net of foreign tax. The charge is on the amount after foreign tax, and no foreign tax credit is given against it.
- Your own amounts only. You can designate only amounts you would have been taxed on if remitted; a spouse cannot designate them for you (RDRM73200, example 1).
- Mixed funds. Designated amounts in a mixed fund are treated as remitted first (RDRM75000 onwards).
Inheritance Tax: the long-term residence test
From 6 April 2025 you are a long-term UK resident in a tax year if you were UK resident for the previous 10 consecutive tax years, or for at least 10 of the previous 20. A long-term resident's overseas assets can be within Inheritance Tax on a lifetime transfer or on death (gov.uk). Under the rule it replaced, from 6 April 2017 to 5 April 2025 you were deemed UK domiciled after 15 of the previous 20 tax years (gov.uk).
- After leaving: long-term residence can continue for up to 10 tax years, scaled to how long you were resident. HMRC's examples: 10 to 13 years of residence, 3 years; 14 years, 4 years; 15 years, 5 years.
- Transitional rule: if you had deemed UK domicile on 30 October 2024, are non-resident for 2025/26 and do not return, long-term residence stops after 3 years of non-residence. If on 30 October 2024 you had neither domicile nor deemed domicile and are non-resident for 2025/26, you are not a long-term resident unless you return.
- Reset: returning after 10 consecutive years of non-residence resets the count.
- Trusts: overseas assets in a trust you set up or added to can be charged depending on your status. HMRC says there is no IHT on your death on trust assets placed in trust while you were non-UK domiciled, overseas on 30 October 2024 and overseas at death or when your rights ended.
- Spouses: a spouse or civil partner who is not a long-term resident can elect to be treated as one (IHTM47034).
Points to check before you act
- Count your years. FIG eligibility depends on 10 consecutive years of non-residence before arrival; IHT status depends on residence over the previous 20 years. Both use the statutory residence test.
- Compare claim and no-claim for each year. The FIG claim costs your allowances, so a year with little foreign income may be better without it.
- Separate earnings from investment income. Work done abroad needs an Overseas Workday Relief election, which is capped.
- Decide on the TRF while the 12% rate applies. 2026/27 is the last year at that rate; 2027/28 is at 15% and the facility then ends.
- Get advice on trusts and IHT. The trust and long-term residence rules turn on dates and facts that a general guide cannot cover.
Related guides
- UK residence (SRT) guide - day-counting rules under the Statutory Residence Test.
- UK Inheritance Tax rules guide - nil-rate bands and reliefs.
- UK Capital Gains Tax rules guide - rates and exemptions.
- UK digital nomad tax guide - residence for people who move often.
- UK vs US tax guide - for dual filers.
- UK vs EU tax comparison - context for cross-border arrivers.
- Family Investment Companies (FIC) guide - a UK estate-planning structure.
- UK trust tax guide - how UK trusts are taxed.
Frequently asked questions
What is the 4-year FIG regime and when did it start?
The 4-year foreign income and gains (FIG) regime replaced the remittance basis on 6 April 2025 (Finance Act 2025, Part 2). A qualifying resident who makes a claim on their Self Assessment return pays no UK tax on the foreign income and gains they claim for. You are a qualifying resident if you are UK tax resident under the statutory residence test and still within your first 4 years of UK residence after at least 10 consecutive tax years of non-UK residence. The test is about residence, not domicile.
What do I give up by claiming the FIG regime?
For any year you claim, you lose your Income Tax Personal Allowance and your Capital Gains Tax annual exempt amount, and Married Couple's Allowance, Marriage Allowance and Blind Person's Allowance if you were eligible for them. Claimed foreign income still counts in adjusted net income for Tax-Free Childcare, free childcare and the High Income Child Benefit Charge. Whether a claim is worth it depends on how much foreign income and gains you have against the value of those allowances, so model both positions.
Does the FIG regime cover salary for work done abroad?
No. Foreign earnings and foreign specific employment income are outside the FIG regime. They can instead be relieved under the reformed Overseas Workday Relief, which needs a separate election and claim on the Self Assessment return for each qualifying year, and from 6 April 2025 is capped at the lower of 30% of the qualifying employment income or £300,000 a year. Making an OWR election also costs the Personal Allowance and annual exempt amount for that year.
What is the Temporary Repatriation Facility (TRF)?
The TRF lets former remittance basis users designate foreign income and gains that arose before 6 April 2025 while they were on the remittance basis, and pay a flat charge instead of tax at normal rates when the money is later brought to the UK. It runs for 3 tax years. The charge is 12% of the amount designated in a return for 2025/26 or 2026/27 and 15% for 2027/28 (HMRC RDRM73400). You must be UK resident in the year of designation and have been subject to the remittance basis for at least one earlier year.
Do I have to bring the money to the UK to use the TRF?
No. HMRC says you do not have to remit the designated amount during the TRF period to get the low rate, although you can. Designations are made in the Self Assessment return and are treated as made at the start of that tax year. Once the charge is paid, the designated amount can be remitted later without a further tax charge. No credit is given for foreign tax against the TRF charge; it is a charge on the net amount after foreign tax.
How does the IHT long-term residence test work?
From 6 April 2025 domicile and deemed domicile no longer decide whether overseas assets are within UK Inheritance Tax. You are a long-term UK resident in a tax year if you were UK resident for the previous 10 consecutive years or for at least 10 of the previous 20 years. A long-term resident is within IHT on overseas assets they own outright. The old deemed domicile test, from 6 April 2017 to 5 April 2025, needed 15 of the previous 20 tax years.
How long does long-term residence last after I leave the UK?
Up to 10 tax years, but less if you were not resident for all of the previous 20 years. On HMRC's figures, 10 to 13 years of residence gives a 3-year tail, 14 years gives 4 years and 15 years gives 5 years, rising to 10 for 20 years. Someone who was deemed domiciled on 30 October 2024 and is non-resident in 2025/26 stops being a long-term resident after 3 years if they do not return. Returning after 10 consecutive years of non-residence resets the count.
What changed for offshore trusts?
Inheritance Tax can now be charged on overseas assets in a trust you set up or added to, depending on your long-term residence status, even if you were not a long-term resident when you settled it. HMRC says there is no IHT on your death on trust assets that were placed in the trust while you were non-UK domiciled, were overseas on 30 October 2024 and are overseas at your death or when your rights in the trust end. Trustees should be told when your status changes, as separate trust charges may arise. Take specialist advice.
Can a spouse elect to be treated as a long-term resident?
Yes. A spouse or civil partner who is not a long-term UK resident can make a spousal long-term UK residence election (HMRC IHTM47034). This matters because a transfer from a long-term resident to a spouse who is not one is exempt only up to the nil-rate band, with the rest a potentially exempt transfer (HMRC IHTM47038 example). After an election, transfers between the spouses qualify for full spouse exemption, but the electing spouse is treated as a long-term resident for all IHT purposes. The election cannot be revoked and lapses only after 10 consecutive years of non-UK residence, so take advice first.