Since 6 April 2025, someone who becomes UK resident after at least 10 consecutive tax years of non residence can claim full relief from UK tax on qualifying foreign income and gains for their first four tax years of residence. The relief is not automatic: it must be claimed on the Self Assessment return, source by source, every year, and a claim costs the personal allowance and the capital gains annual exempt amount for that year.

What replaced the remittance basis?

From 6 April 2025 all UK residents are taxed on the arising basis on their worldwide income and gains, and domicile no longer decides how foreign income is taxed (RFIG41000). The remittance basis has gone. In its place, the foreign income and gains (FIG) regime gives a time limited relief to genuinely new or returning residents. The rules for income are in sections 845A to 845J of the Income Tax (Trading and Other Income) Act 2005, and the rules for gains are in Schedule D1 to the Taxation of Chargeable Gains Act 1992. HMRC’s guidance is in the Residence and FIG Regime Manual from RFIG40000.

Unlike the old regime, relieved income and gains can be brought to the UK at any time with no tax charge. Where the money is kept makes no difference to the relief.

Who is a qualifying new resident?

Under section 845B ITTOIA 2005, you are a qualifying new resident for the first tax year you come to, or return to, the UK if:

  • you are UK resident for that year under the statutory residence test;
  • you were not UK resident for at least 10 consecutive tax years immediately before it;
  • you are not a member of the House of Commons or the House of Lords for any part of the year; and
  • you are at least 10 years old at the start of the year.

You are then also a qualifying new resident for each of the 3 tax years immediately following, provided you are UK resident and not a member of either House in that year. Nationality, domicile and past use of the remittance basis are irrelevant (RFIG41000).

Two residence points catch people out. First, a year in which you are treaty resident elsewhere still counts as a year of UK residence for these tests, and so does a split year, even though part of it is an overseas part (RFIG44000). Secondly, someone who arrived in the 2022 to 2023, 2023 to 2024 or 2024 to 2025 tax year can be a qualifying new resident from that earlier year, but claims can only be made from 2025 to 2026 onwards, so they get only the remaining years of the four.

How does the four year window run?

The window is fixed by the calendar, not by the number of claims you make. Someone who becomes resident in 2026 to 2027 after a decade abroad can claim for 2026 to 2027, 2027 to 2028, 2028 to 2029 and 2029 to 2030, and not after that. If they become non resident for one of those years, that year is lost and cannot be added at the end (RFIG44000). You do not have to claim every year: you can claim in year 1, skip years 2 and 3, and claim again in year 4 (RFIG42100). To qualify again you would need another 10 consecutive years of non residence.

Which income and gains can be relieved?

Section 845H lists qualifying foreign income. It broadly mirrors what used to be taxable on the remittance basis, and includes:

  • profits of a trade carried on wholly outside the UK, including a partner’s share;
  • profits of an overseas property business;
  • foreign interest and dividends from non UK resident companies;
  • royalties and other income from intellectual property;
  • foreign pension income, offshore income gains, and certain trust and transfer of assets abroad income.

Section 845I excludes disqualified income, which is taxed as it arises. This covers performance income of entertainers and sportspeople (wherever the performance takes place), certain pension payments, certain income under the settlements legislation, and some income from securities and transferred income streams (RFIG45200).

Foreign employment income is not in the list. Instead, overseas workday relief is available for employment duties performed outside the UK, under Chapter 5C of Part 2 of the Income Tax (Earnings and Pensions) Act 2003. For each qualifying year it is capped at the lower of 30% of the relevant qualifying employment income and £300,000 (EIM43600).

For gains, a qualifying foreign asset gain is a gain on an asset situated outside the UK that does not derive at least 75% of its value from UK real property. Certain gains attributed from non resident companies and trusts can also be relieved (RFIG45500).

How do you make a claim?

A claim must be made on your Self Assessment return for the year, on the residence and FIG regime pages (SA109), and must identify and quantify each source of income or gain to be relieved (RFIG42100). There is no de minimis and no automatic relief. A claim for one source does not cover another, and a claim for year 1 does not roll forward to year 2.

The deadline is the first anniversary of the normal 31 January filing date. For 2026 to 2027, whose normal filing date is 31 January 2028, the last day to claim is 31 January 2029 (RFIG42300). Claims can be amended or withdrawn within the same limit. There is no statutory discretion to accept late claims, and a consequential claim after an HMRC assessment is blocked where the lost tax arose from careless or deliberate behaviour, under section 845A(6).

A claim for too small an amount is still valid but relieves only the amount claimed. A claim with no amount at all is invalid.

What does a claim cost you?

Making a foreign income claim, a foreign gain claim or an overseas workday relief election for a year removes, for that year, entitlement to (sections 845E and 845G ITTOIA 2005 and RFIG43000):

  • the personal allowance and blind person’s allowance;
  • the married couple’s allowance reduction and the marriage allowance;
  • relief for certain life insurance payments;
  • the capital gains annual exempt amount;
  • relief for foreign losses of that year, including losses of a trade or property business carried on wholly abroad, which are lost permanently.

Two further effects are easy to miss. Adjusted net income is calculated as if the relief had not been given, so all foreign income still counts for the High Income Child Benefit Charge and the tapering of allowances. And tax relief on pension contributions can be restricted where relieved income includes relevant UK earnings, though not below the basic amount of £3,600 (section 845F).

What does a claim look like in practice?

HMRC’s own example at RFIG42100 shows how precise the claim must be. Yan is a qualifying new resident for 2026 to 2027. Her overseas property business has turnover of £250,000 and expenses of £15,000, giving profits of £235,000. She also has £20,000 of profits from a personal training business carried on wholly outside the UK.

  • To relieve the property profits she must declare and claim £235,000 on her return.
  • That claim does not cover the training profits. She must claim those separately.
  • If she claims only £15,000 for the training business, £15,000 is relieved and the remaining £5,000 is taxed at the usual rates.

Whether claiming is worthwhile depends on the numbers. Someone with modest foreign interest and a UK salary may lose more from the personal allowance than the relief saves, so the comparison should be run each year.

What about money from before 6 April 2025?

The regime only relieves income and gains arising on or after 6 April 2025. A former remittance basis user who returns after 10 years away cannot use it for foreign income and gains that built up while they were taxed on the remittance basis, even if remitted during the four years (RFIG45100). Their route for that money is the temporary repatriation facility.

What are the common mistakes?

  • Assuming the relief applies automatically because the income stays offshore.
  • Making one global claim instead of a claim for each source.
  • Counting four claims rather than four calendar tax years.
  • Forgetting that a claim for gains alone still costs the personal allowance.
  • Treating a year of treaty residence abroad as a year of non residence for the 10 year test. Treaty questions are separate; see how double tax treaties work.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.