5th February 2026

What is the Foreign Income and Gains Regime?

When an individual is a UK tax resident, the UK normally taxes their worldwide income and gains on the arising basis, regardless of whether the money stays overseas or is remitted to the UK. The four-year Foreign Income and Gains (FIG) regime creates a time-limited relief for certain people who become UK residents after a long period of non-UK residence.

HMRC’s overview and examples sit here: Check if you can claim the 4-year foreign income and gains regime (GOV.UK).

Technical detail is in HMRC’s manual: Residence and FIG Regime Manual (GOV.UK) and RFIG41000 FIG regime: Introduction.

Who can claim the four-year FIG regime

You can claim the FIG regime if you are a UK tax resident in a tax year and you had a continuous period of 10 UK tax years (or more) of non-UK tax residence immediately before the year you become UK resident. The regime is based on residence, not domicile or citizenship.

Key point for planning: treaty residence elsewhere under a double tax treaty does not make someone “non-UK resident” for FIG qualification purposes; the test is UK domestic residence. (Keep this sentence in if it reflects your colleague’s intended meaning, but treat it as a technical point that should be checked against the client facts.)

Deadlines: when a claim must be made

A FIG claim is made via Self Assessment and must be filed by the anniversary of 31 January following the end of the tax year, which is effectively 12 months after the normal online filing deadline.

HMRC example: for 2025/26, the normal filing deadline is 31 January 2027, so the claim deadline is 31 January 2028.

HMRC time limits page: RFIG42300 FIG regime: time limits.

You must quantify the income and gains you want relieved

To claim FIG relief, the return must identify and quantify the relevant foreign income and/or foreign gains. If you do not quantify the amounts, HMRC can treat them as chargeable to UK tax.

You do not have to claim in every eligible year

Eligibility can run for up to four tax years, but a person does not have to claim in every year. A common approach is to claim in some years and not others, depending on the pattern of overseas income and disposals.

Split years and temporary departures: how the four-year clock behaves

Split-year treatment can still use up a year

Where the Statutory Residence Test applies split-year treatment, HMRC guidance still treats that year as a full year of UK residence for FIG purposes, which can shorten the practical period available.

SRT manual page: RFIG21010 Split year treatment: what a split year is.

Temporary non-residence during the four years

If someone becomes temporarily non-UK resident during the four-year period, GOV.UK examples show that they cannot claim for the non-resident year, but they may still claim for the remaining eligible resident years, depending on facts.

Remittances: the claim applies even if money comes to the UK

Where a valid FIG claim applies to a source, it applies regardless of whether the relevant amounts are remitted to the UK in the same year or in a later year.

What overseas income can fall within the four-year FIG regime

The four-year FIG regime can apply to many categories of foreign income, including:

• Accrued income profits
• Adjusted income
• Annual payments not otherwise charged
• Certain telecommunications rights, non-trading income
• Certain types of pension income
• Dividends
• Estate income
• Films and sound recordings, non-trading income
• Foreign deemed income under the Transfer of Assets Abroad provisions
• Foreign income arising under the settlements legislation
• Income Based Carried Interest (ICBI) arising by virtue of pre-arrival services
• Income not otherwise charged
• Interest
• Offshore income gains
• Partnership income
• Profits from deeply discounted securities
• Property business profits
• Purchased life annuity payments
• Royalties and other income from intellectual property
• Trade profits
• The foreign proportion of certain income received from a Qualifying Asset Holding Company by an individual performing investment management services

Foreign partnerships: when profits count as foreign

For FIG purposes, profits of a foreign partnership are treated as foreign only where the individual carries out all partnership duties outside the UK.

Foreign income that is not relieved under the FIG regime

Foreign income not relieved under FIG includes:

• Foreign employment income paid through third parties
• Income from pensions paid under the Overseas Pensions Act 1973
• Income paid in connection with foreign securities received in exchange for UK securities
• Payments from UK tax relieved funds within relevant non-UK pension schemes
• Profits from the sale of foreign dividend coupons
• Profits of certain disposals concerned with UK land are treated as trading profits
• Unremittable income, charged on withdrawal of relief after the source ceases (Section 844 ITTOIA 2005)
• Offshore life insurance policies and investment bonds are subject to chargeable event gains, whether or not a personal portfolio bond

Related employment points

• Relevant foreign earnings and foreign-specific employment income may instead fall under Overseas Workday Relief rules (separate from FIG).
• Income from the performance of a related activity is not available under FIG, including income connected to sportspersons and entertainers, and payments or distributions by personal service companies.

Foreign gains relieved under the FIG regime

Relieved gains can include:

• Gains on disposal of assets situated outside the UK
• Gains accruing to participants in non-UK companies, to the extent they accrue on the disposal of assets situated outside the UK
• Gains attributed to settlors of non-resident settlements under Section 86 TCGA 1992, to the extent they accrue on disposal of assets situated outside the UK
• Gains attributed to beneficiaries of non-resident settlements in respect of capital distributions or benefits under Section 87 TCGA 1992 or Schedule 4C TCGA 1992
• Carried interest gains, to the extent the gain element relates to investment management services performed outside the UK
• The foreign proportion of certain gains received from a qualifying asset holding company by an individual performing investment management services

Situs and UK land-rich assets

Normal CGT situs principles determine whether an asset sits outside the UK. For FIG purposes, an asset that derives at least 75% of its value from UK land, where the individual has a substantial interest, is treated as a UK-sited asset.

Making a claim: income, gains, and Overseas Workday Relief

• You can claim FIG relief for income, gains, or both, and HMRC treats these as separate claims.
• A separate election can apply for Overseas Workday Relief.

HMRC page on claims: RFIG42100 FIG regime: claims for relief.

Losses, personal allowance, and the CGT annual exempt amount

If you make a FIG claim or an Overseas Workday Relief election:

• You cannot claim foreign income losses or foreign capital losses arising in the year of the claim.
• The claim works on a source-by-source basis; you do not have to claim relief on every source.
• You lose entitlement to the income tax personal allowance and the CGT annual exempt amount in the year of the election, even if you claim for income only, gains only, or Overseas Workday Relief only.

This is wealth. Built with Wisdom.

If you’d like to discuss UK tax, wealth management, or succession planning, our advisers are here to help

Please note this is a general guide and is not advice that can be relied on. It is important that you seek specific advice for your own circumstances. 

This material is intended for both Professional and Retail Clients, as defined by the Dubai Financial Services Authority. Metis Financial Planning Limited is regulated by the Dubai Financial Services Authority.