The UK's Foreign Income and Gains (FIG) Regime: The Four-Year Rule for New Arrivals

The UK's foreign income and gains regime lets someone who becomes UK resident after at least 10 consecutive tax years abroad claim relief from UK tax on their foreign income and gains for up to four tax years. The claim is made on the Self Assessment return, one year at a time, and it costs you the personal allowance and the capital gains annual exempt amount for any year you use it.

The regime, usually called FIG, started on 6 April 2025 and replaced the remittance basis for new arrivals. It is more generous in one way, because relieved income can be brought to the UK freely, and stricter in another, because the window is fixed and short. This guide covers who qualifies, how the four years are counted, how to claim, what the claim costs, and why a US citizen needs to run the numbers on both returns before ticking the box.

Who qualifies for the foreign income and gains regime?

You qualify if you are UK resident for the tax year and you were not UK resident in any of the 10 consecutive tax years immediately before your first year of UK residence. HMRC's manual at RFIG44000 calls this person a "qualifying new resident" and adds two narrow conditions for the first year: you must not sit in the House of Commons or House of Lords, and you must be at least 10 years old at the start of the tax year.

Residence here means residence under the Statutory Residence Test. Domicile plays no part. An American who has lived in New York all their life and a British citizen returning after a decade in Singapore are treated the same way, provided the 10-year gap is genuine and unbroken. One year of UK residence inside that 10-year look-back, even a short student or secondment year that happened to meet the Statutory Residence Test, restarts the clock.

HMRC's manual also makes clear that treaty residence elsewhere does not take you outside the test. If you are UK resident under domestic law, that year counts as a UK resident year for FIG purposes.

How does the four-year window work?

The four-year window is four consecutive tax years, starting with the first tax year in which you are UK resident after the 10-year gap. GOV.UK's guidance on checking whether you can claim the 4-year FIG regime is explicit that "You cannot roll any unused years over to a later year."

Three details catch people out:

• A split arrival year is a full year. RFIG44000 states that a year in which split year treatment applies is a full year of UK residence for these purposes. If you arrive in February and are resident for that tax year, you have used year one on about two months.
• Years abroad do not stop the clock. If you become non-resident part way through the window, you cannot claim for the years you are away, and the window does not extend to make up for them.
• Earlier arrivals get the tail end only. If your UK residence began before 6 April 2025, you can claim only for the years of your original four-year window that fall in 2025 to 2026 or later.

A timeline for three arrival dates

Arrival and residence position	Year one	Last year of the window	Years you can claim
Arrived September 2026, UK resident for 2026 to 2027	2026 to 2027	2029 to 2030	All four
Arrived February 2026 and UK resident for 2025 to 2026 (split year)	2025 to 2026	2028 to 2029	All four, but year one covers only the UK part of 2025 to 2026
Arrived 2022, first resident year 2022 to 2023	2022 to 2023	2025 to 2026	2025 to 2026 only

Whether a late-in-the-year arrival makes you resident for that tax year depends on the Statutory Residence Test. Someone who lands in February with few UK ties may not be resident until the following tax year, which moves the whole window forward by a year. That is worth checking before you accept any assumption about where the window starts.

What income and gains can be relieved?

The relief covers foreign income and foreign gains. GOV.UK gives examples including profits of a trade carried on wholly outside the UK, profits of an overseas property business, dividends from non-UK companies and interest from foreign bank accounts. Gains on the disposal of non-UK assets can be relieved as foreign gains. UK-source income, such as UK salary, UK rent and UK bank interest, stays taxable as normal.

Employment income is the major exclusion. GOV.UK states that foreign earnings and foreign specific employment income are not eligible for FIG relief. A qualifying new resident may instead claim Overseas Workday Relief on earnings for work done outside the UK. From 6 April 2025 that relief is limited to the lower of 30% of the qualifying employment income or £300,000 a year, according to HMRC manual EIM43600, and it needs its own election.

For an American, "foreign" means non-UK. US brokerage dividends, US bank interest, rent from a US property and gains on US shares are all foreign income or gains from the UK point of view, which is why the regime looks attractive at first glance.

How to claim FIG relief on your Self Assessment return

There is no separate application. The claim is made on the Self Assessment return for each year you want relief, and HMRC's helpsheet HS266 for the 2025 to 2026 return sets out the steps:

1. Confirm you are UK resident for the year and that it falls inside your four-year window.
2. Complete the SA109 "Residence and foreign income and gains (FIG) regime etc" pages. HS266 points to box 28 for a foreign income claim and box 29 for a foreign gains claim.
3. Identify each amount you want relieved. HS266 says you must claim for each amount of foreign income, from each source, that you want relieved, and the same applies to gains.
4. Report the underlying income and gains on the relevant supplementary pages, such as SA106 for foreign income and SA108 for capital gains.
5. File by the normal deadline. The claim itself can be made or amended up to 12 months after the normal filing date, so for 2025 to 2026, whose return is due by 31 January 2027, the last date to claim is 31 January 2028.

If you have never filed before, you will need a Unique Taxpayer Reference first. Our UK Self Assessment service handles registration, the SA109 pages and the claim schedule together.

What does a FIG claim cost you?

A FIG claim costs you several UK allowances for the whole tax year, whether you claim on income, on gains or on both. HMRC's manual at RFIG43000 and HS266 list what goes:

• The personal allowance. For 2026 to 2027 this is £12,570, per the GOV.UK Income Tax rates page. Losing it means your UK salary is taxed from the first pound.
• The capital gains annual exempt amount. GOV.UK's Capital Gains Tax allowances page gives £3,000 for the current year, 2026 to 2027. It goes even if you only claim on income.
• Other reliefs. The blind person's allowance, the married couple's allowance, the transferable marriage allowance and relief on certain life insurance payments.
• Foreign losses. Foreign capital losses in the year cease to be allowable, and losses of a foreign trade or property business in a claim year cannot be used or carried forward.

Two further points are easy to miss. Relieved foreign income still counts towards adjusted net income, so it can trigger the High Income Child Benefit Charge or affect Tax-Free Childcare. RFIG43000 also notes that tax relief on pension contributions is reduced by reference to foreign income you claim on.

Because the relief is claimed source by source, you can choose. A newcomer with a small foreign bank interest figure and a UK salary might decide the claim is not worth the lost allowance that year, then claim in a later year when a large foreign gain arises.

How does the foreign income and gains regime interact with US tax?

For a US citizen or green card holder, FIG relief changes the UK bill but not the US one. The IRS page on US citizens and resident aliens abroad is direct: you are "subject to tax on worldwide income from all sources", whatever the UK does.

The link between the two systems is the US foreign tax credit, claimed on Form 1116. The IRS guidance on the foreign tax credit allows a credit only for foreign income tax you have actually paid or accrued. Relieved income carries no UK tax, so there is nothing to credit. Four consequences follow.

• US-source income. Much of an American's "foreign" income is US-source: dividends, interest and gains in a US brokerage account, or US rent. Without a FIG claim, the UK would normally tax it and give credit for US tax under the treaty, so the UK charge is often reduced to the excess of UK tax over the US tax credited. A FIG claim removes that excess, not the whole bill. Our guide to US-UK double taxation relief explains how the credits are ordered.
• Third-country income. Income from a third country, such as a Canadian dividend, is taxed in the US at US rates either way. A FIG claim takes away the UK layer, which helps when UK rates are higher.
• UK salary. Losing the personal allowance raises the UK tax on UK earnings. The US will credit UK tax on UK salary, but many Americans in the UK already pay more UK tax than US tax on that salary, so the extra UK tax often becomes an unused credit rather than a saving.
• Gains. A FIG claim can remove UK capital gains tax on selling US shares, but the US still taxes the gain on its own terms and timing. The annual exempt amount is lost for the year.

The practical rule is that FIG relief saves an American roughly the UK tax that would have exceeded the US tax on the same foreign income and gains, minus the cost of the lost allowances. Sometimes that is a clear gain, and sometimes it is negative. It has to be modelled on both returns together, which is the core of our foreign income and gains regime planning work for new arrivals.

Illustrative example: a US citizen moves to London in September 2026, is UK resident for 2026 to 2027 and earns a UK salary of £90,000. In the same year she sells US shares at a large gain. A FIG claim would take the gain out of UK capital gains tax, but it would also remove her £12,570 personal allowance, which at the 40% higher rate for 2026 to 2027 (rates outside Scotland) adds about £5,028 of UK tax on her salary, and remove the £3,000 annual exempt amount. The US taxes the gain regardless. Whether she is better off depends on how much UK tax on the gain would have exceeded the US tax, and whether the extra UK tax on her salary can be used as a credit on her US return. This is a simplified illustration, not advice.

Where does the Temporary Repatriation Facility fit?

The Temporary Repatriation Facility is not part of the FIG regime and is generally not available to new arrivals. HMRC's manual describes it as a facility for former remittance basis users, meaning people who used the remittance basis in a tax year before 2025 to 2026, to designate foreign income and gains from before 6 April 2025 at a reduced rate. Under RDRM73400 the charge is 12% for amounts designated in a 2025 to 2026 or 2026 to 2027 return and 15% for 2027 to 2028, after which the facility closes.

It matters for Americans who lived in the UK before April 2025 and claimed the remittance basis, then left and have now returned. For them, old unremitted income may be dealt with under the facility, while new income may fall under FIG if the 10-year gap test is met. Most people arriving for the first time since April 2025 can set it aside.

Claim or not: a decision table

Your position in a window year	UK effect of a FIG claim	US effect	Usual direction
Small foreign interest only, UK salary	Small saving, personal allowance lost	None on the interest; extra UK tax on salary may go unused	Often not worth claiming
Large foreign gain in the year	UK capital gains tax removed; allowances lost	US still taxes the gain	Model it: can be worthwhile
Little or no UK income, substantial foreign income	Lost allowance matters less	US tax unchanged	Often worth modelling
Foreign rental or trading losses	Losses not allowable in claim years	US losses unaffected	Check before claiming
Not a US citizen or green card holder	Full UK relief on foreign income and gains	No US layer	Frequently worth claiming

What people get wrong about the FIG regime

• Treating it as automatic. Nothing happens unless you claim on the return, for each year and each source.
• Arriving just before 5 April. A few weeks of residence at the end of a tax year can use up a whole year of the window.
• Forgetting the look-back. A past year of UK residence within the previous 10 tax years rules you out entirely.
• Assuming it covers salary. Employment income needs Overseas Workday Relief, which has its own election and cap.
• Ignoring the US return. For Americans, the UK saving is only part of the picture. Our overview of tax obligations for Americans living in the UK sets out the US filings that continue regardless.

The bottom line

The foreign income and gains regime is a four-year opportunity with fixed edges: a 10-year gap before, four consecutive years after, and a claim that must be made on the return each year. For people with no US tax exposure it is often valuable. For US citizens it is a planning decision, because the US keeps taxing the same income and the lost UK allowances can outweigh the relief. US/UK Cross Border Tax, US CPAs and UK tax advisers working as one team in London, Manchester, New York and San Francisco, models both returns before a claim is made. See how we help Americans in the UK, or contact us to review your window.