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Tax on Remittance Basis
Replaced by 4-Year FIG Regime
Our experienced tax accountants act fast on the UK reforms. With the remittance basis replaced by the 4-Year Foreign Income & Gains (FIG) regime, we assess eligibility, optimise TRF options, map clean capital, and handle HMRC—reducing stress while securing practical, compliant outcomes.
Get Help for Temporary Repatriation Facility
Remittance Basis Abolished from 6 April 2025
The option to claim the remittance basis ended on 6 April 2025. We will review your timeline and confirm your residency history. We will calculate your current UK tax on foreign income and gains. We will check if you qualify for the 4-Year Foreign Income & Gains (FIG) regime and prepare your SA100/SA106 with supporting evidence. This way, you will stay compliant, reduce risk, and act confidently. Get a fixed-fee quote.
Non-Resident Trusts, Distributions & UK Tax Exposure
Non-resident trusts need careful management after recent changes. We identify sources of funds, track distributions, and evaluate UK tax liabilities for settlors and beneficiaries. We provide clear schedules, analyse mixed funds, and prepare files that meet HMRC standards. This helps protect tax reliefs while avoiding double taxation and penalties. Contact an expert for assistance.
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What exactly changed on the remittance basis as of 6 April 2025?
From 6 April 2025, the remittance basis was abolished and replaced with a 4-Year Foreign Income & Gains (FIG) regime for qualifying new UK residents. The UK moved to a residence-based approach: all UK residents are taxed on worldwide income/gains unless they qualify for, and claim, FIG on eligible foreign income/gains during their first four UK-resident tax years.
If you claim FIG, you choose which foreign sources to shelter each year; however, you’ll lose certain allowances (like the Personal Allowance and CGT Annual Exempt Amount) for that year. The FIG regime doesn’t cover employment earnings—those are handled by the reformed Overseas Workday Relief (OWR) if you meet its tests.
Practically, the change means many long-term residents who previously relied on remittance rules now operate on the arising basis, while genuinely new arrivals may enjoy a four-year window to restructure finances efficiently. If you’re mid-move, check whether your four-year window began before April 2025—only the remaining years can be claimed after 2025/26.
Action points: confirm your residence history under the Statutory Residence Test, list foreign income/gains by source and year, and decide where FIG (and OWR for earnings) add the most value. Tax Accountant can confirm eligibility, model savings, and file your claim within Self Assessment with clean evidence packs.
Who qualifies for the FIG regime, and how long does it last?
You may claim FIG if you’re a UK resident in the tax year, and you’re within your first four UK-resident tax years after at least 10 consecutive tax years of non-UK residence. If your first four-year period began before 6 April 2025, you can still claim FIG only for the years remaining within that original four-year window during/after 2025/26.
If you leave the UK temporarily during the four-year period and become non-resident, you cannot claim for the years you’re away, but you may claim again for any remaining qualifying years when you return—unused years do not roll forward beyond the four-year window. A claim is made on your Self Assessment return; you can select which foreign sources to include each year.
Key trade-offs: claiming FIG for a year means you lose certain allowances (Income Tax and CGT personal allowances; Marriage Allowance; Blind Person’s Allowance), and your foreign income/gains still count toward adjusted net income for things like the High Income Child Benefit Charge. Keep a timeline of residence, entry dates, split-year treatment (if relevant), and all foreign income/gain schedules. Our Tax Advisors can test eligibility under the HMRC rules, prepare the claim (SA100/SA106 schedules), and plan around allowances you’ll forgo, so you only claim when it truly benefits you.
What income and gains does FIG cover—and what doesn’t it cover?
FIG covers foreign income and gains arising in your eligible four-year period. Examples include profits of a trade carried on wholly outside the UK, overseas property business profits, foreign dividends, and foreign bank interest. You can choose which sources to include; you don’t have to shelter everything.
Income that is not covered by FIG includes foreign employment earnings and certain specific employment-related amounts—those are considered under Overseas Workday Relief (OWR) if you qualify and make an OWR election in your return. Practically, many new arrivals ring-fence portfolio income (dividends/interest), overseas rental profits, and non-UK capital gains within FIG, while handling employment income via OWR.
Remember: claiming FIG for the year means you lose specific UK allowances, and your sheltered foreign income/gains still influence adjusted net income, potentially affecting benefits/charges even though the income/gains are not taxed. Keep detailed records (statements, broker reports, completion statements on disposals), and track FX rates used.
Call Tax Accountant to map your sources, decide what to shelter, and align your FIG claim with OWR where appropriate, giving you a single, coordinated plan that’s compliant and efficient.
How do I claim FIG in practice, and what allowances do I lose?
You claim FIG on your Self Assessment tax return for each year you want relief. HMRC allows you to choose which foreign sources and gains to include, enabling you to tailor the claim annually. The trade-off is important: for any year you claim FIG, you lose your Income Tax Personal Allowance and CGT Annual Exempt Amount, and (if otherwise eligible) Marriage Allowance, Married Couple’s Allowance, and Blind Person’s Allowance.
Also, even though sheltered income/gains aren’t taxed in the UK, they still count toward adjusted net income, which can affect the High Income Child Benefit Charge and access to certain childcare schemes. If your four-year period began before April 2025, you can only claim for the remaining qualifying years after 2025/26.
Good hygiene: maintain a residency timeline, evidence of foreign sources, and a working paper showing which items were sheltered each year. For complex portfolios, keep country-by-country schedules.
Our Tax Advisors can prepare the SA100/SA106 with FIG claims, explains the allowances you’ll surrender, and models scenarios (claim vs no claim) so you can see the net effect before you file. We’ll also monitor your coding notice if HMRC attempts to estimate untaxed income mid-year, ensuring a smooth cash flow.
What is the Temporary Repatriation Facility (TRF) and the 12%/15% rates?
The Temporary Repatriation Facility (TRF) is a time-limited option (2025/26 to 2027/28) for former remittance-basis users to designate pre-6 April 2025 foreign income/gains and pay a reduced UK charge to “clean” those funds. The government set the TRF rate at 12% for the first two years (2025/26 and 2026/27) and 15% in 2027/28.
Elections are made through Self Assessment, stating amounts designated and, if relevant, amounts remitted in the tax year. Designation can also be made while assets remain exempt property in trust structures, so that if the asset later ceases to be exempt and is treated as remitted, no further UK tax arises on that remittance.
TRF is not automatic; you must opt in and keep robust tracing records, especially for mixed funds. Done well, TRF can let you bring legacy offshore wealth onshore at a known, low rate and then use it freely in the UK. Let our Tax Advisors help identify suitable funds, manage mixed-fund analysis, draft the election, and coordinate remittances, so you get certainty on tax and clean, HMRC-ready documentation.
I have “old” offshore money—how do pre-2025 remittances and mixed funds work now?
If you have pre-6 April 2025 foreign income/gains offshore, remitting them to the UK under normal rules would trigger UK tax at your marginal rates. The TRF offers a way to designate qualifying funds at 12%/15% during 2025/26–2027/28, then remit them without a further UK charge on that remittance.
The major challenge is managing mixed funds (accounts or portfolios containing assets from different years/sources). HMRC allows designation of the foreign income/gains from which exempt property derives while the property is still exempt; if later the asset ceases to be exempt and that is treated as a remittance, it will be a remittance of designated qualifying overseas capital, and no extra UK tax should arise.
In practice, you’ll need a clear tracing file showing sources, timing, and designations. If you don’t use TRF, mixed-fund ordering and tracing still apply and can be punitive. Good process: identify clean capital, segregate funds, and decide what to designate.
How does Overseas Workday Relief (OWR) interact with FIG?
FIG does not shelter employment income. Instead, OWR may relieve qualifying foreign employment income during your qualifying years. From 6 April 2025, OWR is available to qualifying new residents (after 10 years non-resident) and, crucially, it now includes an annual financial cap: the lower of 30% of qualifying employment income or £300,000 per year.
OWR claims are made via Self Assessment; you must make an OWR election and quantify the relief. HMRC expects a workday apportionment between UK and overseas duties on a just and reasonable basis. Importantly, OWR can be applied whether pay is received in the UK or offshore, and certain transitional rules preserve relief for individuals who arrived and claimed OWR before 6 April 2025.
Practically, plan FIG for investment/rental income and OWR for earnings, ensuring that records (such as calendars, travel logs, and payroll evidence) support your apportionment. We can coordinate both claims, checks the cap, aligns split-year treatment where relevant, and prepares a tidy computation HMRC can follow—so your first four years in the UK run smoothly and compliantly.
What changed for non-resident trusts, distributions and UK exposure?
The trust landscape changed alongside FIG. Matching of pre-6 April 2025 foreign income/gains to trust distributions continues, but UK-resident individuals no longer rely on the remittance basis for worldwide trust distributions. HM Treasury’s technical note confirms that beneficiaries or settlors within the 4-year FIG regime can receive benefits from 6 April 2025, free of UK tax charges, whether or not the benefits are received in the UK, subject to certain conditions.
Outside FIG (or after four years), standard rules bite—so understanding beneficiary status by year is vital. For IHT, the government is also moving from domicile to a form of residence-based exposure; keep an eye on transitional trust rules. Practically, you’ll need trust accounts, distribution statements, and matching analyses to show what’s being received and how it’s taxed under FIG vs non-FIG years.
Our Tax Experts can review deeds, builds beneficiary year-by-year trackers, liaises with trustees, and prepares SA106/foreign pages to ensure distributions are treated correctly and risks are managed effectively. If TRF applies to historic FIG within structures, we’ll coordinate designations with trustees to avoid double-counting.
What pitfalls should I avoid—and what deadlines matter?
Common trap: assuming remittance rules still apply in 2025/26; claiming FIG without noticing you lose UK allowances for that year; misunderstanding that sheltered foreign income/gains still affect adjusted net income; missing that employment income isn’t covered by FIG (use OWR); and failing to plan TRF within its three-year window and 12%/15% rates.
Another pitfall is starting your four-year period before 6 April 2025 and expecting four full years after—only the remaining years are available. If you break UK residence within the four-year window, you can’t claim for the years away, and unused years don’t roll forward.
Deadlines: make FIG/OWR elections on your Self Assessment for each year; TRF elections are made via returns for 2025/26–2027/28. Keep residence evidence (SRT), foreign income/gain schedules, and workday logs for OWR.
Contact us to run a “no-surprises” plan: we map your four-year calendar, model when to claim FIG (and when not to), prepare TRF designations on time, and keep your evidence pack HMRC-ready. That’s how you protect relief and avoid penalties.
How can Tax Accountant help me act fast and stay compliant?
We verify Statutory Residence Test outcomes and build your four-year timeline. Next, we separate foreign income/gains by source and year, model the value of claiming FIG vs keeping UK allowances, and run a joined-up plan with OWR for employment income. For legacy offshore money, we analyse accounts/portfolios, identify clean capital and mixed funds, and structure TRF designations at 12% or 15% so you can bring funds onshore with certainty.
Then we prepare and file the Self Assessment (SA100/SA106), including the FIG and OWR elections, and create HMRC-ready schedules that trustees, banks, and lenders understand. If your circumstances change—such as temporary non-residence, split years, or trust distributions—we update the plan to keep you compliant. Send us an email for a fixed-fee quote and a practical roadmap.