UK FIG Regime: the new 4-year window for new residents
The Foreign Income and Gains Regime replaces the non-dom system from April 2025. We analyse how to leverage full exemption during the first four years of UK tax residence.
The structural shift
From 6 April 2025, the United Kingdom replaced the non-domiciled regime, two centuries old, with the Foreign Income and Gains (FIG) Regime. The new architecture is residence-based rather than domicile-based, and grants full exemption on foreign-source income and gains during the first four tax years after becoming UK resident, provided the taxpayer was non-resident for the prior ten years.
Who qualifies
- New residents arriving on or after 6 April 2025.
- Returnees after at least ten complete tax years outside the UK.
- Applicable to entrepreneurs, relocated executives and Latin American HNWIs who structure their arrival with prior planning.
Key benefits
- 0% on dividends, interest, capital gains and foreign passive income.
- Funds may be remitted into the UK without surcharge (unlike the former remittance basis).
- Compatible with Overseas Workday Relief for income earned abroad.
Limitations
- The window is inelastic: four years from the first tax year of residence.
- From year five, the taxpayer falls under worldwide taxation.
- Does not apply to UK-source income, taxable from day one.
Strategic implications for LatAm
Colombian, Mexican and Peruvian families with finite residence horizons (children's studies, executive postings) find FIG a neutral tool. Those planning indefinite residence must model the abrupt year-five cliff, considering protected offshore trusts, monetisation of assets before arrival and dividend deferral.