If you are a new arrival in the UK from April 6th, 2025, you will be able to claim 100% relief on your foreign income in the first 4 years of UK residence using the new FIG regime, meaning, you can remit the income into the UK without paying any UK tax.
Once the 4 years have finished, you will be taxed on all your income, whether UK or foreign sourced.
The definition of “new arrival” is the following –
- Must not have been a UK resident in any of the 10 years immediately prior to your arrival
- This includes both a non-UK national moving to the UK and individual born in the UK (UK domiciled) or UK national now returning to the UK
If an individual was a new arrival in 2025-26 tax year and was considered a UK resident for that tax year, but then left the UK in 2026-27 tax year and returned to the UK in 2028-29 tax year, they will only be able to claim FIG relief in 2028-29 tax year, as this is the 4th year from their original arrival tax year.
The FIG regime will exempt most foreign sourced income, however there are a few exemptions –
- Foreign employment income or income from performance of activities overseas
- Foreign dividends income from your foreign owned company
- Certain foreign pensions
- Offshore life insurance policies and investment bonds
Claiming FIG Relief
An individual who wants to claim the FIG relief, will need to process a UK tax return, this relief does not apply automatically.
Loss of UK Allowances
If an individual claims the FIG relief they will lose their UK tax allowances, currently £12,570 on general income and £3,000 on Capital Gains. The loss of the allowances will apply to both allowances, even if your foreign income only relates to one type.
So, depending on the individuals’ circumstances, you will need to check if it’s more advantageous to pay the tax on your foreign income or claim the FIG relief.
Example –
Sam arrives in the UK in April 2025 and in his first year of residence has UK employment of £60,000 and foreign property income of £10,000. Sam is a higher rate taxpayer and will be taxed at 40% on his foreign income, so UK tax due on foreign income will be £4,000. In this scenario, it would be tax efficient to declare the foreign income and not claim the FIG relief, as by losing the tax allowance of £12,570, it causes Sam to pay £1,000 more in UK tax.
If Sam would have earnt £130,000 in UK employment, as this amount of income automatically causes Sam to lose his tax allowance, then claiming FIG relief would obviously be the correct option.
