Client eligible for the UK Foreign Income & Gains regime
The Foreign Income and Gains regime can create a valuable planning window for some internationally mobile clients becoming UK resident.
From 6 April 2025, qualifying new residents can claim relief on eligible foreign income and gains arising during their first four tax years of UK residence after at least 10 consecutive tax years of non-UK residence.
That makes the timing of residence, investment restructuring, liquidity and future retirement planning particularly important.
Josh Clancey works alongside tax advisers and other professionals where FIG eligibility creates wider financial-planning decisions.
The tax position comes first
FIG relief is a tax matter.
The appropriate UK tax adviser should establish:
- whether the client is a qualifying new resident
- when the four-year period began
- which foreign income or gains qualify
- whether a claim should be made
- which amounts should be included in the claim
- the effect of claiming on other UK allowances
Once that position is established, financial planning can consider how the client's foreign assets, investment portfolio and future cash flow should be structured around it.
The regime is claimed annually rather than applying automatically. A client does not have to claim in every eligible year, but unused years cannot be carried beyond the original four-year period.
Common planning areas for FIG-eligible clients
Overseas investment portfolios
The client may hold substantial portfolios outside the UK that produce foreign income or gains.
The investment strategy should be reviewed in light of the tax adviser's FIG analysis rather than simply moved or restructured automatically.
Realising foreign gains
The timing of disposals may matter where a qualifying client is within the four-year FIG period.
Tax advice should establish the treatment before investment transactions are implemented.
Bringing capital to the UK
Where qualifying foreign income or gains have received FIG relief, HMRC states that they can be brought to the UK without an additional UK tax charge merely because they are remitted.
That can affect liquidity and investment planning.
International retirement assets
The client may also hold pensions and retirement accounts accumulated overseas that need separate tax and financial-planning analysis.
Long-term investment structure
The four-year FIG window is temporary.
The client's investment arrangements therefore need to work not only during the relief period, but also once the client becomes fully taxable on worldwide income and gains under the normal UK arising basis.
Inheritance tax
FIG eligibility and inheritance-tax residence are separate tests.
A client can qualify for FIG relief while their long-term residence position for IHT follows a different timetable.
Questions to ask when a client may qualify
Has the client been non-UK resident for at least 10 consecutive tax years?
This is fundamental to FIG eligibility.
Which of the client's first four UK-resident tax years are still available?
The four-year clock begins with the first year of UK residence following the qualifying period of non-residence.
What foreign income and gains are expected?
Investment income, disposals and other foreign sources should be identified before the tax adviser determines whether a claim is worthwhile.
What assets does the client currently hold overseas?
Existing portfolios may need to be reviewed for long-term suitability under UK residence.
Does the client need capital in the UK?
Liquidity requirements may influence how foreign assets are managed during the FIG period.
What happens after year four?
The investment strategy should be designed with the post-FIG tax position in mind.
What is the client's inheritance-tax residence history?
FIG qualification does not determine whether the client is a long-term UK resident for IHT purposes.
Useful resources for advisers working with FIG-eligible clients
The Professional Adviser's Guide to UK Residence, the FIG Regime and Inheritance Tax
A broader guide to the post-2025 framework affecting internationally mobile clients becoming or ceasing to be UK resident.
The FIG Regime and Investment Planning for UK Returners
A focused technical brief covering the financial-planning implications of FIG eligibility and the four-year window.
The UK Statutory Residence Test for Internationally Mobile Clients
A technical brief covering the residence framework that determines when the client's UK tax residence begins.
The Professional Adviser's Guide to UK Returners
A broader planning guide for clients becoming UK resident again after a period overseas.
UK Returner Pre-Arrival Checklist
A practical checklist covering residence, investments, pensions and other matters that may need review before arrival.
Long-Term Residence and UK Inheritance Tax
A technical brief covering the separate residence framework now used for inheritance-tax purposes.
The four-year window is valuable, but temporary
The FIG regime applies for a maximum of four consecutive tax years beginning with the client's first year of UK residence after at least 10 consecutive tax years of non-UK residence.
A client can choose not to claim in one of those years and still claim in a later qualifying year, but the unused year is lost rather than added to the end of the period.
That creates an important financial-planning distinction.
The objective should not simply be to maximise short-term tax relief.
The client also needs an investment and retirement structure that remains appropriate when the FIG period ends and normal UK taxation of worldwide income and gains resumes.
That may involve considering:
- portfolio structure
- future income requirements
- timing of disposals
- cash requirements
- pension assets
- retirement horizon
- future residence
- beneficiary planning
The tax adviser determines the tax strategy. Josh can then ensure the financial plan is built around it.
FIG eligibility and inheritance-tax residence are not the same thing
The FIG regime and the UK's inheritance-tax residence rules use different tests.
For FIG purposes, a qualifying new resident broadly needs at least 10 consecutive tax years of non-UK residence before their first qualifying UK-resident year.
For IHT, from 6 April 2025 an individual can become a long-term UK resident based on residence in at least 10 of the previous 20 tax years, subject to the detailed rules.
That means a client's FIG planning should not be used as a shortcut for their estate-planning analysis.
The tax and legal advisers should establish the IHT position separately.
Financial planning can then consider investments, pensions, life assurance, liquidity and beneficiary arrangements around both regimes.
When should the referral happen?
Ideally, before UK residence begins or as early as possible within the client's first UK tax year.
That gives time to identify:
FIG eligibility
overseas portfolios
expected foreign income and gains
potential disposals
liquidity requirements
pensions and retirement accounts
long-term investment structure
inheritance-tax considerations
Early coordination can make it easier for the tax and financial-planning work to support the same strategy.