In Brief
- The UK remittance basis was abolished from 6 April 2025 under the Finance Act 2025. New UK residents who were non-resident for at least 10 consecutive prior years qualify for the 4-year Foreign Income and Gains (FIG) regime — but from Year 5, worldwide taxation on the arising basis applies in full.
- The Long-Term Resident test, which triggers worldwide Inheritance Tax exposure, applies after 10 out of the last 20 years of UK residence — a lower threshold than the former deemed domicile rules — with an IHT tail of up to 10 years after departure.
- The UK-UAE Double Taxation Agreement, signed 12 April 2016, provides income and capital gains tax relief but does not cover Inheritance Tax, making pre-departure IHT planning a separate and urgent consideration for long-term UK residents. The abolition of the UK non-domicile regime on 6 April 2025 removed a tax privilege that had been available to foreign-born UK residents for over two centuries. The Finance Act 2025, which received Royal Assent on 20 March 2025, replaced the remittance basis with a simpler, time-limited regime for new arrivals and a more aggressive Inheritance Tax framework for long-term residents. For high-net-worth individuals who built their UK presence under the old rules, the practical implications depend heavily on where they are in their residency timeline — and how quickly they act before thresholds are crossed. The UAE has become a primary destination for those exiting the UK tax system. The combination of zero personal income tax, zero capital gains tax, and a network of international double taxation agreements makes it one of the most tax-efficient relocation options available to former UK residents. But the transition requires careful sequencing: the UK's new IHT tail means that departure alone does not immediately end UK tax exposure.
The 4-year FIG regime: who qualifies and what it covers The Foreign Income and Gains regime is available to individuals who become UK tax resident after at least 10 consecutive years of non-UK residence. It provides complete exemption from UK income tax and capital gains tax on foreign income and gains for a four-year period from the first year of UK residence. There is no requirement to remit or keep the income abroad — qualifying individuals can bring funds into the UK freely during the FIG period without UK tax. One trade-off is significant: claiming the FIG exemption in any year causes the individual to lose their personal allowance (currently £12,570) and their CGT annual exempt amount (currently £3,000) for that year. For individuals with substantial UK-source income or UK asset gains in the same year, the net benefit of claiming FIG needs to be modelled. Making any one of the three FIG elections (income, offshore gains, mixed fund cleansing) triggers the loss of both allowances for that tax year.
*Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Readers should seek professional advice tailored to their specific circumstances. Information reflects the position as of the publication date and may be subject to change. This article addresses UAE, Australian, UK, and Canadian law where specified; different rules apply in other