The FIG Regime: What Returning UK Expats Need to Know
A once-in-a-generation change for returning expats
For decades, how the UK taxed your overseas income depended on your domicile, broadly where your permanent home was considered to be. Most British expats are UK-domiciled by birth, so they were taxed on their worldwide income the moment they moved back.
On 6 April 2025 that changed. Domicile no longer matters. In its place is the Foreign Income and Gains (FIG) regime, which looks only at how long you have lived outside the UK.
For British expats who have spent years building wealth abroad, this is one of the biggest changes to personal tax planning in a generation. Here are the key changes at a glance:
| Change | What it means for you |
|---|---|
| 4-year FIG window | Up to four tax years of relief from UK tax on foreign income and gains |
| Repatriation facility | Bring older untaxed offshore funds into the UK at a reduced, fixed rate |
| Overseas Workday Relief | Tax relief on earnings for work done abroad, up to £300,000 a year |
| Residence-based inheritance tax | Your worldwide estate is only exposed after years of UK residence |
| Plan ahead | The biggest savings come from decisions made before you return |
The 4-year FIG window
Who qualifies? You must be UK tax resident in the year, and not have been UK resident in any of the 10 tax years immediately before. Most Britons who have spent a decade or more abroad will meet this easily.
What do you get? For up to four consecutive tax years from your return, your foreign income and gains can be free of UK tax. Unlike the old rules, you can bring that money into the UK without triggering a tax charge.
Things to know:
- It isn't automatic. You claim it each year on your Self Assessment tax return.
- It has a cost. In any year you claim, you lose your Personal Allowance, your Capital Gains Tax annual exemption and relief for foreign losses. It's a year-by-year decision, not something to claim by default.
- The clock doesn't stop. The four years run on even if you leave the UK again partway through.
Example: Sarah has lived in Dubai for 12 years and moves back to Bristol in the 2026/27 tax year. Her FIG window runs from 2026/27 to 2029/30. Dividends from her UAE brokerage account, and gains from selling part of her portfolio, can be brought into her UK bank account free of UK tax, as long as she claims the relief each year.
Inheritance tax: the new residence test
Inheritance tax (IHT) is now based on residence too. You only become a Long-Term Resident, with your worldwide estate exposed to UK IHT, once you have been UK resident for 10 of the previous 20 tax years. Until then, generally only your UK assets are in scope.
Leaving the UK doesn't take you out of scope straight away. There is a "tail" of 3 to 10 years depending on how long you lived in the UK.
For long-term expats this is mostly good news: you fall outside the worldwide net. But the clock starts again the moment you return, so it needs watching.
Example: Hannah lived in the UK for 8 years in her twenties, then spent 14 years in Kuwait before moving back to Guildford. She isn't a Long-Term Resident, which gives her valuable time to plan before her worldwide estate falls into the UK IHT net.
Plan before you pack
Every one of these reliefs rewards planning before you move, not after. A simple timeline:
- More than a year before: review which investments and offshore bonds might be better sold or cashed in while you're still non-UK resident. Gains made then generally fall outside UK tax altogether.
- In the months before: confirm you qualify as a new resident, and check for any old remittance-basis funds that could use the repatriation facility.
- Once you arrive: make your claims through Self Assessment each year, weighing up whether each one is worth the allowances you give up.
Example: David has spent 11 years in Muscat and plans to move to Surrey in 2027/28. A review before he moves shows he'll qualify for FIG from 2027/28 to 2030/31, the repatriation facility doesn't apply to him, and he is a long way from Long-Term Residence for IHT. Acting now lets him decide which investments to sell while still tax-free, and set up his claims from day one.
Some of these decisions can't be undone once you become UK resident again. The planning has to happen before the removal van leaves, not after.
In summary
The move from domicile to residence has changed the picture for every British expat thinking about coming home. Four years of relief on foreign income and gains, a discounted route for older offshore funds, more flexible workday relief and a clearer inheritance tax test all reward those who plan their return rather than simply let it happen.
If you're starting to think about moving back to the UK, get in touch for a complimentary review of how these changes apply to you.
This article is for general information only, reflects our understanding of UK tax rules as at September 2026, and is not advice. Tax treatment depends on your individual circumstances and may change.
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