The end of the remittance basis: Understanding the new foreign income and gains regime (FIG)

The 2025/26 tax year marks a significant shift in UK tax policy with the abolition of the remittance basis regime.

In its place, the UK government has introduced the Foreign Income & Gains Regime (FIG) a new system designed to offer clarity and fairness in taxing foreign income for new or returning UK residents. 

A Changing Landscape

We are now seeing many individuals particularly those born in the UK and returning after a period abroad seeking to take advantage of FIG within their first four tax years of UK residency. Additionally, clients who previously benefitted from the remittance basis are now exploring how to optimise their position under this new regime during the same initial period. 

Dual Regime Complexity

The transition between the two regimes presents a number of challenges. Where individuals fall under both the old remittance basis (for protected funds) and the new FIG rules, care must be taken. Bringing funds into the UK may trigger tax consequences, especially if it is unclear whether those funds are protected under the old system or exempt under FIG. 

Making a FIG Claim

To be taxed under the FIG regime, individuals must now actively claim it via their Self-Assessment Tax Return. While this introduces an extra administrative step, the system is expected to be more transparent than the former remittance basis. 

Taxpayers must submit their claim by 31 January following the standard return deadline, clearly detailing the income and/or gains they wish to include under FIG. This added transparency brings with it reporting complexity, requiring close collaboration between taxpayers and their advisers. 

The Importance of Compliance

Accurate reporting is crucial. Errors or omissions could result in lost tax planning opportunities or unexpected tax liabilities. With careful planning and professional advice, however, individuals can bring foreign income into the UK under FIG without incurring unnecessary tax charges. 

The move to the Foreign Income & Gains Regime marks a new chapter in UK tax for international individuals. As the system beds in, understanding and proactive management will be key to making the most of the new rules and avoiding costly mistakes. 

If you’re unsure how the new FIG regime may impact your tax position, get in touch with our team to discuss your options.