Remittance Basis of Taxation: FIG Regime, TRF, and IHT Changes

The remittance basis of taxation was a UK tax treatment that let non-domiciled UK residents pay income tax and capital gains tax on foreign income and gains only when those funds were brought into the country. It was abolished on 6 April 2025 and replaced by the Foreign Income and Gains (FIG) regime, a residence-based system that gives qualifying new arrivals a four-year window of relief.¹ The old rules still matter to anyone with pre-April 2025 offshore income, because the mixed fund ordering rules, the capital gains rebasing concession, and the Temporary Repatriation Facility all depend on them.

How the Remittance Basis Worked

Under the remittance basis, a UK resident who was not domiciled in the UK could choose to pay tax only on UK-source earnings plus any foreign income or gains they actually brought into the country. Foreign wealth that stayed offshore went untaxed.² Everyone else paid on the “arising basis,” meaning worldwide income as it accrued.

Eligibility turned on domicile, a legal concept separate from where you live. It refers to the country you treat as your permanent home, usually inherited from a parent at birth, and it stays with you unless you take clear, lasting steps to make somewhere else permanent.³ A formal claim was made each year under section 809B of the Income Tax Act 2007.⁴

The £2,000 Automatic Threshold

If your unremitted foreign income and gains for the year came to less than £2,000, the remittance basis applied automatically. You kept your personal allowance and capital gains annual exempt amount and did not tick the remittance basis box on your return. Foreign losses could not be netted against gains to bring you under the threshold.⁵

Deemed Domicile After 15 Years

Long-term residents eventually lost access. From 6 April 2017, anyone who had been UK-resident for at least 15 of the previous 20 tax years was treated as “deemed domiciled” and taxed on worldwide income like any other UK-domiciled resident.³

The Annual Charge

Making a formal claim was free in the early years but got expensive over time. Long-term residents who claimed the remittance basis paid a flat charge that scaled with residence:

7 of the previous 9 years resident: £30,000 per year
12 of the previous 14 years resident: £60,000 per year

These charges applied from 6 April 2017.⁶ Anyone making a formal claim also lost their personal allowance and capital gains annual exempt amount.⁷ The people caught by the £2,000 automatic threshold kept their allowances.

What Counted as a Remittance

The definition under section 809L of the Income Tax Act 2007 was deliberately broad. It covered any situation where money, property, or a service derived from foreign income or gains was brought to, received in, or used in the UK by or for the benefit of the taxpayer or a “relevant person” such as a spouse, partner, or child.⁸ Wiring money to a UK bank account was the obvious case. Less obvious cases still counted: using an offshore credit card to pay for a UK hotel, buying jewellery abroad and shipping it home, or paying off a UK mortgage with overseas funds.⁹

Mixed Fund Ordering

Many non-doms held accounts blending taxable foreign income, capital gains, and clean capital. When money left one of these “mixed fund” accounts and came into the UK, a statutory ordering rule decided what was being remitted. The system worked on a last-in, first-out basis by year, and within each year the ordering ran through untaxed income first, then untaxed gains, then foreign-taxed income and gains, and finally clean capital.¹⁰ The practical result: withdrawals from an unsegregated account were taxed at the worst possible rate.

This ordering still matters in 2026 for anyone remitting pre-April 2025 income from a mixed fund. There is one twist under the new regime: amounts designated as Temporary Repatriation Facility capital jump to the front of the queue ahead of every other category.¹⁰

The FIG Regime for New Arrivals

Since 6 April 2025, all UK residents are taxed on worldwide income and gains as they arise, regardless of domicile. The Foreign Income and Gains regime that replaced the remittance basis provides a time-limited exemption for people who are genuinely new to the UK.¹

To count as a “qualifying new resident” you have to meet all three of the following:

The current tax year is one of your first four years as a UK resident.
You were non-UK-resident for at least 10 consecutive tax years immediately before becoming UK-resident.
You are not a member of the House of Commons or House of Lords.

Qualify, and you can claim 100% relief on foreign income and gains for up to four consecutive tax years. There is no cap on the amount relieved, no flat-rate charge like the old £30,000 or £60,000 fees, no loss of personal allowance, and no tax if you bring the relieved income into the UK.¹

The four-year limit is hard. You must claim each year separately, and skipped years do not roll forward. Once your four years expire, worldwide taxation applies with no further shelter. People who became UK-resident between 2022-23 and 2024-25 can use any unused years of their window under a transitional rule, but the clock started when they first arrived, not when the regime launched.¹

The Temporary Repatriation Facility

Former remittance basis users often have offshore wealth that was never UK-taxed. Bringing that money in under the current rules would trigger full tax at standard rates. The Temporary Repatriation Facility opens a three-year window with reduced rates:

2025-26 and 2026-27: 12% on designated pre-April 2025 foreign income and gains
2027-28: 15%

You elect into the TRF by designating specific amounts of pre-6 April 2025 foreign income and gains on your tax return. The facility also covers unattributed income held within trust structures.¹¹ After 2027-28 the facility closes, and any pre-2025 income later brought to the UK is taxed at full rates.

Capital Gains Rebasing

Alongside the TRF, former remittance basis users received a one-off capital gains concession. Foreign assets held on 5 April 2017 can be rebased to their market value on that date when eventually sold, so only the gain accruing after April 2017 is taxable. This applies to current and past remittance basis users whether or not they use the TRF.¹²

Inheritance Tax Now Runs on Residence

Inheritance tax used to follow domicile. It no longer does. Under the 2025 rules, you are exposed to inheritance tax on worldwide assets if you have been UK-resident for 10 consecutive years or 10 of the previous 20.¹³

Worldwide exposure does not end the moment you leave. Depending on how long you were resident, a “tail” of up to 10 years continues after departure. Twenty years of UK residence keeps you in the net for a full decade after leaving; 10 to 13 years of residence sheds it after three. If you return after 10 consecutive years of non-residence, the counter resets.¹³

Filing and Deadlines

The SA109 supplementary form is still the key document for anyone with foreign or residence issues, but it is now titled “Residence and foreign income and gains (FIG) regime etc” and is used to record residence status and claim FIG relief.¹⁴ HMRC’s current notes say the SA109 should be completed within the Self Assessment system rather than submitted as an electronic attachment.¹⁵

Self Assessment deadlines have not changed. For 2025-26, paper returns are due by 31 October 2026 and online returns by 31 January 2027, with any tax owed (including TRF charges) due on that January date.¹⁶ A FIG regime claim for 2025-26 can be made or amended up to 31 January 2028, a two-year window after the normal filing date.¹

1
GOV.UK. HS266 Foreign Income and Gains (FIG) Regime (2026)
2
GOV.UK. Remittance Basis 2025 (HS264)
3
GOV.UK. Guidance Note for Residence, Domicile and the Remittance Basis: RDR1
4
Legislation.gov.uk. Income Tax Act 2007 – Application of Remittance Basis
5
HM Revenue & Customs. Residence, Domicile and Remittance Basis Manual – RDRM32110
6
GOV.UK. Remittance Basis Changes
7
HM Revenue & Customs. Residence, Domicile and Remittance Basis Manual – RDRM32040
8
Legislation.gov.uk. Income Tax Act 2007 – Section 809L
9
HM Revenue & Customs. Residence, Domicile and Remittance Basis Manual – RDRM36030
10
GOV.UK. Residence, Domicile and Remittance Basis Manual – RDRM35240
11
GOV.UK. HS264 Remittance of Pre-6 April 2025 Foreign Income and Gains and the Temporary Repatriation Facility (TRF)
12
GOV.UK. Reforming the Taxation of Non-UK Domiciled Individuals
13
GOV.UK. Inheritance Tax if You’re a Long-Term UK Resident
14
GOV.UK. Residence and Foreign Income and Gains (FIG) Regime etc (Self Assessment SA109)
15
HM Revenue and Customs. SA109 Notes 2025-26 – Residence and Foreign Income and Gains (FIG) Regime etc
16
GOV.UK. Self Assessment Tax Returns: Deadlines