Updated guidance clarifies eligibility, claims process, qualifying income and gains, and the impact on tax allowances under the FIG regime effective from 6 April 2025.
UK’s HMRC has issued updated guidance on the foreign income and gains (FIG) regime on 6 April 2026, setting out eligibility criteria, claim procedures, qualifying income and gains, and the implications for tax allowances.
Background: FIG replaces remittance basis
The FIG regime, introduced on 6 April 2025, replaces the remittance basis of assessment following its abolition. From that date, the concept of domicile as a relevant connecting factor has been removed, with the UK tax system now based on tax residence. Consequently, all UK residents are taxed on the arising basis of assessment on their worldwide income and gains.
Who qualifies for the FIG regime?
Under the FIG regime, “qualifying new residents” may claim UK tax relief on foreign income and gains arising during their first four years of UK residence. An individual qualifies if the relevant year falls within their first four years of UK residence following at least 10 consecutive tax years of non-UK residence, provided they are not a member of the House of Commons or House of Lords. UK residence is determined by the statutory residence test (SRT).
The regime applies for up to four consecutive tax years beginning with the year of UK residence. Claims must be made annually for each year in which relief is sought and may apply to foreign income, foreign gains, or both. Taxpayers may choose not to claim in certain years, but unused years cannot be carried forward. Individuals whose four-year period began before 6 April 2025 may access the regime from the 2025–26 tax year until the end of their four-year period, including those who became UK residents in the 2022–23 tax year.
Where a valid claim is made, qualifying foreign income and gains are not subject to UK tax, and there is no requirement to remit such income to the UK. If remitted, no UK tax liability arises.
How to make a claim
To claim relief, taxpayers must complete the “Residence and foreign income and gains (FIG) regime etc” pages (SA109) within the Self Assessment tax return and indicate the relevant claims by selecting:
- box 28 for foreign income,
- box 29 for foreign gains, and
- box 30 for UK income or gains treated as foreign under the qualifying asset holding company (QAHC) rules.
Relief must also be reported on the relevant supplementary pages depending on the type of income or gain, including SA103F, SA104F, SA106, SA107, and SA108. Claims must specify the amount of eligible foreign income and gains per source, calculated in accordance with applicable tax rules. There is no cap on the amount of relief available during the qualifying period.
The deadline for making a claim is 12 months after the normal filing date. For the 2025–26 tax year, with a filing deadline of 31 January 2027, claims must be submitted by 31 January 2028. Amendments are permitted within the same timeframe, subject to specific conditions.
Impact on allowances and reliefs
The guidance highlights consequences of making a claim. Taxpayers forfeit various allowances and reliefs, including personal allowance, CGT annual exempt amount, blind person’s allowance, and certain reliefs for married couples and civil partners. In addition, foreign income and capital losses cannot be claimed, nor carried forward or backward.
Foreign income relief is disregarded when calculating adjusted net income (ANI), which affects entitlements such as tax-free childcare and the High Income Child Benefit Charge (HICBC). Pension contribution relief may also be restricted where a foreign income claim is made, with reductions linked to “relevant UK earnings”, subject to a minimum ‘basic amount’ of GBP 3,600.
The guidance further confirms that Foreign Tax Credit Relief (FTCR) cannot be claimed on income covered by a FIG claim and may only apply to income not relieved under the regime.
What income and gains qualify?
Qualifying foreign income includes profits from trades carried on wholly outside the UK, overseas property business income, dividends from non-UK resident companies, foreign interest, and certain foreign pension income. However, relevant foreign earnings and foreign specific employment income are excluded, although relief may be available through an Overseas Workday Relief (OWR) election.
Certain categories of disqualified income remain taxable, including specific income under settlements legislation, performance income, and particular pension income. The treatment of trust income depends on the nature and residence of the trust, while income arising under the transfer of assets abroad provisions and settlements legislation may qualify for relief subject to conditions.
Relief for gains applies to qualifying foreign asset gains, gains attributed under section 3 TCGA 1992, qualifying QAHC gains, and gains attributed under sections 86, 87, 89(2), and Schedule 4C TCGA 1992.
