What is a Foreign Income and Capital Gains (FIG) Rule?

From April 2025, UK implemented new tax rules based on residence.

The previous non-domiciled UK tax regime is now replaced.

Remittance basis of taxation is no longer in place and substituted by a 4 year foreign income and capital gains rule, abbreviated as FIG.

As you become newly tax resident or resume your tax residence after 10 years of non-residence in the UK from 2025, you are eligible to benefit  from the FIG.

This means for the initial four years of tax residence in the UK, you can elect not to be taxed on your overseas income and gains in the UK.

What are the Six Advantages of Electing FIG?

Let’s list and summarise six advantages of FIG in the UK.

1. It’s a Privilege

This treatment is an exception from general UK tax rules that only apply to international individuals who are new arrivals or resumed their UK residence after 10 years of non-residence.

Only  these international individuals can elect FIG.

2. Perfect for International individuals and their families

There may be many different reasons why individuals and their families may want to relocate and live permanently in the UK.

Ability to choose to be not taxed on foreign income and gains while in the UK is a perfect solution to international individuals and their families.

3. An opportunity to organise your own financial affairs

It allows you to be in control of your finances and make the necessary arrangements before you become tax resident in the UK and elect for a FIG.

4. Bringing in your capital tax-free before becoming tax resident

The regime allows you to bring your overseas capital to the UK tax free without having to differentiate between clean, taxed and non-taxed proceeds.

You are encouraged to bring it all before you become a UK tax resident.

5. Genuinely avoiding double taxation

It is the purpose of the international framework of double taxation treaties to avoid the perils of double taxation.

Double taxation happens when the same category of income, proceeds and capital gains are taxed by several countries.

Although the international treaties are designed to avoid this problem, they mostly fall short as different national tax codes will have different treatment and understanding attached to income, proceeds and capital gains.

For instance, the UK usually offers a tax credit almost automatically where there is double taxation. However, it does not mean that the taxpayer recovers all tax paid overseas. The recovery is usually a partial one and not a complete one.

Depending how you plan your financial and tax affairs and the quality of the professional advice you receive, you are able to do away with double taxation if you elect to apply FIG.

6. Optimising your overseas day relief

Overseas day relief is another exemption as you regularise your overseas financial and tax affairs.

Overseas day relief applies to individuals who continue to work overseas while becoming tax resident in the UK.

In fact, overseas day relief permits international individuals to continue to work overseas and keep their earnings overseas as long as they do not need to bring it to the UK.

This is a versatile tool, which allows flexibility to the individual and the employer where different job roles can be performed under two different contracts in the UK and overseas.

You are only eligible to benefit for OWR if you are eligible and elect FIG.

The FIG

The UK FIG tax rule in the UK allows many international individuals to derive and maintain a number of financial and tax benefits, such as:

• • To be a part of exclusive club for a limited period of time;
  • To derive all beneficial benefits as international individuals;
  • Effectively organise your financial affairs internationally;
  • An opportunity to bring all your capital to the UK tax free;
  • A tool to avoid double taxation;
  • Optimise your international work contracts.

The UK that is keen to attract international capital as much as possible and keep its reputation as the premier international investment centre.

Therefore, FIG remains an advantageous UK tax rule and continues to serve this purpose.

Now is the time to reach out professional advisors like myself to discuss how to benefit and elect FIG and address the wider issues of UK tax planning and asset protection.

There are still a number of viable options that can exist simultaneously.

The best time to benefit from these options is now or before you become a UK tax resident.

Consult the Expert

Book a call with me to discuss the best available options for you and your family.

You may submit your enquiry here.

Saule Voluckyte, M.A.E.S, LL.B, FAIA

I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.

Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.

Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.