Cut Tax on Foreign Income With FIG: The UK’s New 4-Year Regime

UPECO Columnist
2 days ago
3 min read

The UK introduced the Foreign Income and Gains (FIG) regime from 6 April 2025. It is designed for people who move to the UK and have money coming from abroad, such as rent from overseas property, dividends, interest, or capital gains. If you qualify and claim it, the UK can give 100% relief on those foreign income and foreign gains for up to 4 tax years.

This can be a major saving, especially if your UK tax band is high.

What FIG actually does

Under normal UK rules, UK tax residents are often taxed on worldwide income. FIG changes the position for qualifying new residents by allowing the UK to ignore qualifying foreign income and gains for a limited period.

Key point: FIG is not “no tax anywhere.” You may still pay tax in the country where the income arises (for example, Greece). The benefit is that the UK does not add an extra “top-up” charge on the same income during the FIG period.

Another practical benefit is that FIG is not based on bringing the money into the UK. In other words, it is not the old “remittance basis” concept.

Who is FIG for?

FIG is aimed at new UK residents. The main eligibility condition is:

You must be UK tax resident, and

you must not have been UK tax resident in any of the previous 10 UK tax years.

If you meet this test, you can potentially access FIG for up to four consecutive tax years (subject to the rules).

What counts as “foreign income and gains”?

Typical examples include:

Overseas rental income (e.g., property in Greece)
Overseas dividends (e.g., shares in a Greek company)
Overseas bank interest
Capital gains from selling overseas assets (e.g., overseas shares or property)

The relief applies only to foreign income and foreign gains, as defined under the regime.

Also note an important boundary: the regime is part of the post-2025 framework and you generally cannot use it to exempt amounts that accrued outside the relevant periods under the rules.

The “price” of claiming FIG

FIG is valuable, but it is not free.

When you use FIG, you generally give up certain UK tax-free allowances, including:

the Personal Allowance for Income Tax, and
the annual exempt amount for Capital Gains Tax.

This matters because losing allowances can increase your UK tax on your UK income.

So FIG is usually most attractive when:

your foreign income/gains are material, and/or
your UK income is already high enough that your Personal Allowance is reduced anyway.

Scenario - A very simple example

You are UK tax resident and qualify for FIG. You also have:

Greek rental income: £20,000
Greek tax paid: £3,000
Your UK tax band means the UK would normally tax that foreign rent at 40%

Without FIG (normal approach)

UK tax on £20,000 at 40% = £8,000
Credit for Greek tax paid = £3,000
Extra UK “top-up” tax = £5,000

With FIG

UK tax on that £20,000 foreign rent = £0
You still pay the Greek tax as normal
But you lose UK allowances, which may increase your UK tax elsewhere

This is the core trade-off: FIG can wipe out UK tax on foreign income/gains, but it may cost you UK allowances.

Bottom line

FIG is one of the biggest UK tax opportunities for people who are new to UK tax residence and have overseas income or gains. It can turn foreign income that would normally be taxed again in the UK into 0% UK tax for up to four tax years—if you qualify and the allowances trade-off works in your favour.

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ATTENTION!

This article intends to give only a general informative picture and should not, in any case, be taken as a rule. It is strongly recommended to seek a full and professional guidance specifically for your circumstances before making any decisions.