Strategic Planning Under the New FIG Regime: Three Case Studies from the Post-Domicile World

How new arrivals, established residents and departing families should navigate the four-year window, the Temporary Repatriation Facility and the new inheritance tax residence tail

By Dr Clifford Frank, Senior Partner, and Justyna Szymaszek, LLM, LEXeFISCAL LLP

17 July 2026

Estimated reading time: 15 minutes

A question I am asked almost daily, by clients arriving in London and by clients contemplating leaving it, is deceptively simple: what does the end of the non-dom regime actually mean for me? Fifteen months into the new law, the answer has crystallised. The regime introduced by the Finance Act 2025 is neither the calamity feared by some commentators nor the mere relabelling suggested by others. It is a genuinely new architecture, and it rewards those who understand its geometry — the windows that open, the doors that close, and the clocks that run whether or not anyone is watching them.

In this article I set out that architecture and then, because tax planning is learnt through numbers rather than adjectives, I work through three case studies drawn from the situations my firm sees most often: the new arrival, the established former remittance basis user, and the departing long-term resident. The names and figures are illustrative composites; the law, rates and arithmetic are real.

From Domicile to Residence: The New Architecture

The Finance Act 2025, which received Royal Assent on 20 March 2025, abolished the remittance basis of taxation with effect from 6 April 2025 and removed domicile as the connecting factor for income tax, capital gains tax and inheritance tax. In its place stands a system built entirely on residence under the Statutory Residence Test. Every UK resident is now taxed on the arising basis on worldwide income and gains, wherever those amounts are kept and whether or not they are ever brought to this country.

Three consequences flow immediately. First, the familiar planning vocabulary of the last four decades — remittance basis claims, the remittance basis charge, deemed domicile after fifteen of twenty years, mixed fund ordering as a permanent constraint — is now historical. Secondly, the protections previously enjoyed by settlor-interested offshore trusts have been removed: foreign income and gains arising within such structures are attributed to a UK resident settlor as they arise, under the transfer of assets abroad code in the Income Tax Act 2007, s.720 et seq. and the Taxation of Chargeable Gains Act 1992, s.86 as amended, unless the settlor qualifies for the new four-year regime. Thirdly, and in my view most importantly, Parliament coupled the new charge with a set of deliberate reliefs — the four-year foreign income and gains (‘FIG’) regime, the Temporary Repatriation Facility and capital gains tax rebasing — which are intended to be used, and which are time-limited.

The Four-Year FIG Window

The centrepiece for newcomers is relief for the qualifying new resident. An individual who becomes UK resident after at least ten consecutive tax years of non-UK residence may claim 100 per cent relief on relievable foreign income and foreign chargeable gains arising during their first four tax years of residence. The qualifying categories are defined at s.845H of the Income Tax (Trading and Other Income) Act 2005 for income and in Schedule D1 to the Taxation of Chargeable Gains Act 1992 for gains, both inserted by the Finance Act 2025, and HMRC’s guidance sits in the Residence and FIG Regime Manual at RFIG41000 onwards. Nationality and former domicile are irrelevant: a returning British national who has spent the requisite decade abroad qualifies on the same terms as a foreign national arriving for the first time. The relieved categories are broad but not unlimited: UK source income and gains remain fully taxable, gains on assets deriving at least 75 per cent of their value from UK land fall outside the relief, and — a point routinely missed by returners — foreign income and gains which arose before 6 April 2025, whilst the individual was previously UK resident on the remittance basis, cannot be relieved at all (RFIG45100).

The relief must be claimed annually through Self Assessment, and it may be tailored — a claim can extend to gains but not income, to some sources but not others, and to some years but not all. The window itself, however, is rigid. It comprises the first four tax years of residence, and a year lost is lost: neither non-residence in the middle of the window nor a decision not to claim rolls the entitlement forward. Relieved amounts may be remitted to the UK at any time without further charge, which is a profound departure from the old law.

A claim has a price. The personal allowance and the capital gains tax annual exempt amount are forgone for the year of claim; foreign capital losses accruing in that year cease to be allowable losses (TCGA 1992, s.16(4)) and foreign trading and property losses are likewise restricted — consequences which apply whichever of the claims or the Overseas Workday Relief election is made (RFIG43000); and finance costs on overseas lettings are not relieved. For most claimants the price is nominal, as the first case study below demonstrates. Employees enjoy a parallel benefit in the reformed Overseas Workday Relief: within the same four-year window and on the same ten-year condition, earnings from employment duties performed overseas are relievable up to the lower of £300,000 or 30 per cent of total employment income for the year, and — unlike its predecessor — the relieved earnings need not be kept offshore.

The Transitional Toolkit for Former Remittance Basis Users

For the established client base — those too long resident to qualify as new residents — Parliament provided two transitional measures, both of which I regard as the most valuable planning opportunities of the current decade.

The Temporary Repatriation Facility

The Temporary Repatriation Facility, in Schedule 10 to the Finance Act 2025, permits an individual who previously claimed the remittance basis to designate pre-6 April 2025 foreign income and gains and pay a flat rate upon them: 12 per cent for designations in 2025/26 and 2026/27, rising to 15 per cent in 2027/28, after which the facility closes entirely on 5 April 2028. Two features deserve emphasis. It is the designation, not any remittance, which fixes the charge — designated capital may be brought to the UK years later with no further tax. And designated amounts are treated as coming out of a mixed fund first, under a new Step A1 in the ordering rules (RDRM75200), which at a stroke unlocks accounts that the ordering rules had rendered practically unusable for a generation. A designation must, however, be quantified precisely and supported by documentation capable of withstanding scrutiny — in practice the forensic account analysis matters as much as the election itself. The facility extends, on prescribed conditions, to foreign income and gains within offshore trust structures matched to capital payments and benefits.

Capital Gains Tax Rebasing to 5 April 2017

The second measure rebases foreign assets to their market value at 5 April 2017 for disposals made on or after 6 April 2025. The conditions are precise: the individual must have claimed the remittance basis for at least one tax year from 2017/18 to 2024/25 and must have been neither UK domiciled nor deemed domiciled at any time before 6 April 2025; the asset must have been held on 5 April 2017 and must have been situated outside the UK throughout the period from 6 March 2024 to 5 April 2025, subject to limited exceptions. Rebasing applies automatically where the conditions are met, subject to an election to disapply it asset by asset — an election worth modelling wherever the April 2017 value sits below original cost.

Inheritance Tax: Long-Term Residence and the Tail

The inheritance tax reform is, for wealthy families, the most consequential element of the package. From 6 April 2025 an individual is a long-term resident — and therefore within inheritance tax on worldwide assets — if they have been UK resident in at least ten of the preceding twenty tax years. The years need not be consecutive, and split years count in full. Exposure therefore arrives roughly five years earlier than under the old fifteen-of-twenty deemed domicile test, and it catches foreign domiciliaries whom the old law would never have reached.

Leaving the UK does not end the exposure at once. A long-term resident who departs remains within worldwide inheritance tax for a ‘tail’ of between three and ten tax years: three years for those resident ten to thirteen of the last twenty, lengthening by one year for each further year of residence, to a maximum of ten years for those resident twenty years or more. The status resets only after ten consecutive years of non-residence. Transitional rules preserve, broadly, the old three-year deemed-domicile tail for individuals who were non-resident in 2025/26.

Trusts have been rewired around the same concept. The excluded property status of non-UK settled property now follows the settlor’s long-term residence status at each chargeable occasion. Property settled whilst the settlor is a long-term resident is relevant property; when the settlor later ceases to be a long-term resident, the non-UK property becomes excluded property — but an exit charge arises as it leaves the relevant property regime. As the third case study shows, the sequencing of settlements around this status change has become the central discipline of departure planning.

Case Study One: The New Arrival

‘Amira’, a technology founder, has lived in Dubai for twelve years and becomes UK resident on 6 April 2026. She expects foreign portfolio dividends of £400,000 a year, foreign gains of £600,000 over the coming four years, and UK consultancy income of £150,000 a year. Having been non-resident for well over ten consecutive tax years, she is a qualifying new resident with a window running from 2026/27 to 2029/30.

Her UK consultancy income is taxable throughout — the regime relieves foreign income and gains only. The value of annual FIG claims across the window is set out below, using the additional dividend rate of 39.35 per cent and the higher capital gains tax rate of 24 per cent, with current rates assumed to hold across the window.

The cost of claiming is negligible on these facts. Her income comfortably exceeds £125,140, the level at which the personal allowance is fully tapered away in any event, so its loss costs nothing, and the forgone annual exempt amount of £3,000 is worth at most £720 a year. The claims are, quite simply, overwhelmingly worthwhile.

The planning within the window follows from its rigidity. Everything mobile should be examined for acceleration into the relieved years: disposals, dividend policy in her personal companies, offshore bond encashments. Income and gains deferred beyond 2029/30 fall onto the arising basis at full rates. Overseas Workday Relief adds a further dimension if her plans change: were she to take, say, a £500,000 employment with at least 30 per cent of her duties performed overseas, up to £150,000 of earnings a year would be relievable — the 30 per cent cap on those figures — worth £67,500 annually at the additional rate. She should remit freely but keep meticulous records, because relieved amounts must be quantified and disclosed and HMRC may test them. And she should start the inheritance tax clock in her diary from day one: she becomes a long-term resident after her tenth year, and any excluded property settlement of non-UK assets must be completed before that point if it is to work at all.

Case Study Two: The Established Resident

‘Marco’, an Italian national, has been UK resident since 2013/14, completing his thirteenth tax year of residence in 2025/26, and claimed the remittance basis throughout to 2024/25. He was never deemed domiciled. He holds £2.4 million of unremitted pre-April 2025 foreign income in offshore mixed funds, together with a foreign share portfolio bought in 2010 for £500,000, worth £1.5 million at 5 April 2017, and sold in 2026/27 for £1.8 million. He is far too long resident to qualify for the FIG regime; both transitional reliefs, however, are squarely available to him.

The first step is a Temporary Repatriation Facility designation of the £2.4 million, the comparator below assuming the funds represent non-savings income that would otherwise bear tax at the 45 per cent additional rate on remittance.

Delay is expensive: the same designation made in 2027/28 costs £360,000, and after 5 April 2028 the facility is gone and the full remittance rules reassert themselves. Under-designation carries the same asymmetry — every £1 million left undesignated and remitted after the facility closes would bear tax of up to £450,000, against £120,000 if designated now. The second step is the disposal of the portfolio, where rebasing to 5 April 2017 applies automatically — he claimed the remittance basis after 2017/18, was never deemed domiciled before April 2025, held the shares at the rebasing date and kept them offshore through the qualifying period.

Across the two steps Marco’s position improves by a little over £1 million. Four decisions should be taken before the deadlines bite. He should consider designating more than he currently intends to remit: because the charge crystallises on designation rather than remittance, headroom designated now buys permanent optionality at 12 per cent, a price that will never be seen again. He should commission a forensic audit of his account histories first, since the facility attaches only to qualifying overseas capital and he cannot designate what he cannot identify. He should sequence disposals around rebasing, electing to disapply it, asset by asset, wherever the 2017 value is below cost. And he should review his trust position: since 6 April 2025 his settlor-interested structures no longer shelter current foreign income and gains, whilst historic trust FIG matched to benefits remains designatable under the facility.

Case Study Three: The Departure

‘Elena’ has been UK resident for seventeen of the last twenty tax years and plans to leave for Monaco on 5 April 2027. Her worldwide estate is £20 million, of which £6 million is UK situs and £14 million is not. She wishes to settle £5 million of non-UK investments into trust for her children.

As a long-term resident she is within inheritance tax on the worldwide £20 million. Her tail on departure is seven years — three years plus one for each year of residence beyond thirteen — so she remains within worldwide inheritance tax for the seven tax years from 2027/28 to 2033/34, Monaco notwithstanding. The figures below assume a full nil rate band, no prior chargeable transfers, and no spouse, charity or other exemptions.

The trust instinct — settle before leaving — is now precisely wrong. A £5 million settlement of non-UK assets made whilst she is a long-term resident is an immediately chargeable transfer: 20 per cent on the excess over the nil rate band is £935,000 where the trustees pay the tax, and more if Elena pays it herself, since grossing up then applies. The trust is relevant property thereafter, with ten-yearly and exit charges to follow. The identical settlement made after her long-term residence ends, from 2034/35, creates excluded property with no entry charge at all.

Her plan therefore inverts the old playbook. The settlement is deferred until the tail expires. In the meantime, outright gifts of non-UK assets during the tail are potentially exempt transfers on ordinary principles — effective if she survives seven years from the gift, with taper relief from year three — so an early and deliberate programme of lifetime giving sets the survival clocks running alongside the residence tail. The seven years of contingent £5.6 million exposure is an insurable risk, and term assurance written in trust converts an uncertain 40 per cent liability into a known annual premium. Finally, she must mind the return trap: resuming UK residence restarts the analysis against her whole residence history, only ten consecutive non-resident years reset the test, and years of treaty non-residence still count as years of UK residence for this purpose. Her visits must stay within Statutory Residence Test limits throughout.

The Planning Matrix

The three case studies condense into a simple discipline. Every private client conversation now begins with two questions: where does this individual sit in the residence cycle, and which tools does that position unlock? The arriving client, within the first four years after a decade away, claims annually, accelerates income and gains into the window, uses Overseas Workday Relief where employed, and completes any excluded property settlements before year ten. The established client, a former remittance basis user beyond the four-year window, designates under the Temporary Repatriation Facility before the rates step up and the door closes, audits and cleanses the mixed funds, harvests the 2017 rebasing on disposals, and reviews trust structures whose protections have gone. The departing client computes the tail from their own residence history, defers non-UK settlements until long-term residence ends, runs a lifetime giving programme in the interim, insures the gap, and guards the ten-year reset with disciplined day counts. The tools do not mix freely — a qualifying new resident who never claimed the remittance basis has no use for the facility, and an established resident cannot claim FIG relief — so classification comes first, and sequencing second.

Compliance and Professional Discipline

A word of caution, offered from long experience of watching good planning fail on bad execution. Everything described above is planning inside the law: the FIG regime, the facility and rebasing are reliefs Parliament enacted precisely so that they would be used. The professional risk lies elsewhere. Claims are annual and elective; designations and disapplication elections must be made in time and in proper form; a missed deadline here is an unforced error measured in six figures. Evidence beats assertion: residence day counts and the travel records behind them, complete offshore account histories showing the composition and segregation of funds, dividend vouchers and board minutes for personal companies, and professional valuations of foreign assets at 5 April 2017 will all be tested, and contemporaneous records are the difference between a claim that holds and a dispute that runs. The general anti-abuse rule, the transfer of assets abroad code and the settlements legislation sit over the whole field, and artificiality or misdescription will attract both challenge and consequences under Professional Conduct in Relation to Taxation. Finally, the rules are still settling — technical amendments to the residence-based regime were published on 3 March 2026 and further refinement is likely. In my judgment the provisions most likely to see further movement are those governing trusts and their interaction with the facility, and the rates themselves are hostage to each Budget; positions taken now should therefore be revisited before every year end, and professional advice is particularly critical wherever trusts, mixed funds or a planned departure are in play.

The Dates That Drive the Advice

Fix the fixed dates first. The regime commenced, and the remittance basis and trust protections ended, on 6 April 2025. The 12 per cent designation rate under the Temporary Repatriation Facility is available only until 5 April 2027; the ordinary Self Assessment deadline for 2026/27 claims and designations falls on 31 January 2028; and the facility closes entirely on 5 April 2028 after a single year at 15 per cent. No extension has been signalled. Around those statutory deadlines run the client-specific clocks — each individual’s four-year window, ten-year approach to long-term residence, and three-to-ten-year departure tail — which is why the file review must always precede the planning conversation.

Conclusion

Having advised internationally mobile clients for more than forty years, I have seen several supposed revolutions in this field. This one is real. The new regime is coherent, it is navigable, and for the well-advised it is generous — but its generosity is rationed by the calendar. The clients who will look back on this period with satisfaction are those who classified their position early, ran the numbers honestly, and acted before the windows closed.

If you are arriving in the UK, established here with historic offshore wealth, or planning a departure, LEXeFISCAL LLP would be pleased to assist. Contact us at info@lexefiscal.com or visit www.lexefiscal.com.

Vincit Veritas.

Dr Clifford Frank, LLM(Tax) PhD HDipICA ATT

Senior Partner, LEXeFISCAL LLP

Justyna Szymaszek, LLM (Law)

LEXeFISCAL LLP

Suite 428B, 4th Floor, 33 Cavendish Square, London W1G 0PW

www.lexefiscal.com

Disclaimer: This blog post is for general information purposes only. It does not constitute legal or tax advice and should not be relied upon without seeking professional advice tailored to your specific circumstances. Tax law is complex and constantly evolving; the law is stated as at 17 July 2026. Each person’s situation is unique.

LEXeFISCAL LLP is a member firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW).

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