Introduction The remittance basis of taxation — the regime that allowed non-domiciled UK residents to shield foreign income and gains from UK tax by keeping them offshore — was abolished from 6 April 2025. Every individual who previously relied on the remittance basis now operates under the new foreign income and gains regime. For US […]
The remittance basis of taxation — the regime that allowed non-domiciled UK residents to shield foreign income and gains from UK tax by keeping them offshore — was abolished from 6 April 2025. Every individual who previously relied on the remittance basis now operates under the new foreign income and gains regime. For US citizens living in the UK who were non-doms, the transition requires careful planning across two tax systems simultaneously.
Specialist accountants for the US and the UK who understand the FIG regime’s four-year exemption window, the Temporary Repatriation Facility, and their interaction with the US Foreign Tax Credit are the only advisers who can correctly structure the transition for a dual-resident US citizen. An adviser who understands only the UK side misses the implications for the US FTC. An adviser who understands only the US side cannot advise on the TRF election or the FIG window.
This guide explains the non-dom to FIG transition for US citizens living in the UK. It covers the FIG regime’s structure, the TRF opportunity, how the FIG exemption interacts with the US FTC, and the planning actions available before the four-year window closes. Contact Jungle Tax at https://www.jungletax.co.uk/ before the window closes.
Accountants for the US and UK in the FIG transition context are advisers who understand both the new UK foreign income and gains regime — introduced from 6 April 2025 — and the US federal tax system that applies to US citizens regardless of where they live. The FIG transition requires decisions that affect both systems simultaneously: the TRF election reduces UK tax on remitted pre-April 2025 foreign income, but the same income may already have been reported on prior US federal returns. The FIG four-year exemption covers foreign income and gains — but the US taxes the same income in the year it arises, regardless of UK treatment.
A UK-only adviser cannot model the US FTC impact of the TRF election. A US-only adviser cannot advise on the FIG window conditions or the TRF rate. A specialist who understands both systems is the only adviser who can correctly structure the transition for a US citizen who was previously a non-dom.
The FIG transition affects every UK resident who previously claimed the remittance basis — including US citizens who lived in the UK as non-doms. Many high-net-worth US citizens moved to the UK. They claimed the remittance basis to shelter their non-UK investment income and gains from UK tax, while continuing to report and pay US tax on the same income as required by the US citizenship-based taxation system. The abolition of the remittance basis changes the UK side of their tax position entirely.
The HMRC guidance on the new FIG regime is published at:
https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals
US citizens affected by the FIG transition fall into four categories. First, those who arrived in the UK within the last four years may qualify for the FIG four-year exemption on foreign income and gains. Second, those who arrived more than four years ago and were claiming the remittance basis have lost it and must now report all worldwide income in the UK. Third, those who hold pre-April 2025 offshore income that was never remitted to the UK — they must consider the TRF election to bring those funds to the UK at a reduced UK tax rate. Fourth, for those who have already been taxed on a worldwide basis in the UK, the transition changes little for them, but the TRF opportunity may still apply to earlier years of non-remitted income.
The Temporary Repatriation Facility allows individuals who previously claimed the remittance basis to bring pre-April 2025 foreign income and gains to the UK at a reduced UK tax rate — 12 percent in 2025/26, rising to 15 percent in 2026/27, before the facility closes. After the TRF window closes, remitting the same funds to the UK attracts the full UK income tax or CGT rate on remittance.
For a US citizen who holds pre-April 2025 foreign income that was sheltered from UK tax under the remittance basis, the TRF election is a significant planning opportunity. The decision to elect — and the amount to designate — requires modeling under both UK and US rules before the election is made.
The FIG regime provides a four-year UK tax exemption on foreign income and gains for individuals who become UK residents after a period of non-UK residence. A US citizen who became a UK resident for the first time within the four years before April 2025 may qualify for the FIG exemption on their foreign income and gains during the exemption period.
However, the FIG exemption does not affect the US tax treatment of the same income. A US citizen who qualifies for the FIG exemption pays no UK tax on foreign income during the exemption period — but continues to pay US federal tax on the same income (or obtains the FEIE or FTC to offset it). The FTC calculation changes when the UK tax rate changes: during the FIG exemption period, there may be no UK tax to credit against the US liability.
Our guide to pre-immigration planning before moving to the UK covers the FTC and FIG interaction for those arriving in the UK for the first time.
A US citizen who was claiming the remittance basis and who has significant foreign income — from US investments, US rental properties, or US business interests — now faces UK income tax on that income in full from 6 April 2025. Previously, the income was sheltered from UK tax unless remitted. Now it is taxable in the UK in the year of arising — regardless of whether it is remitted to the UK.
This increases the UK tax liability materially for many US citizens who were non-doms. The accountants for the US and UK at Jungle Tax model the increased UK liability and assess whether the additional UK tax creates additional FTC headroom on the US return or creates excess FTC that cannot be fully credited.
The TRF election covers pre-April 2025 foreign income and gains that were sheltered from UK tax under the remittance basis and have not been remitted to the UK. The individual designates the amount they wish to bring within the TRF — and pays the reduced UK tax rate on that amount (12 percent in 2025/26, 15 percent in 2026/27). The designated income and gains can then be remitted to the UK at any time in the future without further UK tax.
For a US citizen, the TRF election requires careful analysis. The pre-April 2025 foreign income sheltered from UK tax was still reported on prior US federal returns — because US citizenship-based taxation required it. The US tax was paid. Making the TRF election in the UK generates additional UK tax — but may not generate additional US FTC, because the underlying income has already been through the US system. The accountants for the US and UK at Jungle Tax model the TRF election before it is made — calculating the net UK tax cost, the available FTC, and the net cash cost of the election.
A US citizen who became a UK resident for the first time within the four years before April 2025 qualifies for the FIG four-year exemption. During the exemption period, foreign income and gains are exempt from UK income tax and CGT. The individual can choose to claim the exemption or not; opting out allows them to offset foreign losses against other UK gains.
The accountants for the US and UK at Jungle Tax assess FIG eligibility for every client who became a UK resident within the four-year window. Where the exemption is available, the adviser models it against the full worldwide tax position — including the US FTC — to determine whether claiming the exemption or opting out is optimal for the client’s specific situation.
During the FIG four-year exemption period, foreign income and gains are UK-tax-free. This creates a planning window — the four years during which foreign assets can be restructured, sold, or repatriated without UK tax. A US citizen in their FIG exemption period who holds a significant US investment portfolio can crystallize gains during the exemption period — paying only US tax on the gains, with no UK CGT. After the exemption period, the same gains are subject to UK CGT at 20 percent.
The accountants for the US and UK at Jungle Tax identify every restructuring and disposal opportunity available during the FIG window — and sequence the actions to maximize the tax savings before the window closes.
The adviser identifies every source of foreign income and gains that were sheltered from UK tax under the remittance basis before April 2025. This includes: US investment income (dividends, interest, capital gains), US rental income, US business income, income from third-country investments, and any other foreign source income that was kept offshore. The adviser confirms the sterling value of the pre-April 2025 offshore income pool — this is the amount potentially eligible for the TRF election.
The adviser also confirms how much of the pre-April 2025 income has already been taxed in the United States. Because US citizenship-based taxation requires the income to be reported on US federal returns, the US tax has likely already been paid. This affects the TRF calculation — the net UK tax cost of the TRF election is not reduced by an FTC on the TRF payment itself.
The adviser models the TRF election — calculating the UK tax cost at the applicable reduced rate (12 percent in 2025/26), the net cash cost of the election, and the benefit of being able to remit the designated funds to the UK without incurring future UK tax. The adviser compares the TRF cost to the alternative of paying the full UK income tax rate on remittances in future years.
For a US citizen with a large offshore income pool, the TRF election can generate significant savings on future UK tax — particularly if the individual expects to remit the funds to the UK in future years to fund expenditure. The adviser also confirms whether the TRF payment generates any FTC benefit on future US returns.
The adviser confirms FIG eligibility and models the exemption period for the client. Where the four-year window is available, the adviser identifies every asset disposal or restructuring that can be completed during the window to take advantage of the UK tax exemption. The adviser sequences the actions — starting with the highest-value disposals — and confirms the US tax treatment of each action during the FIG period.
After the FIG window closes, the individual is subject to UK tax on worldwide income in full. The adviser establishes the post-FIG annual compliance program — coordinating the UK self-assessment and the US federal return for the first full year of worldwide UK taxation. The FTC calculation changes materially once UK tax on foreign income is payable — the adviser models the new FTC position and confirms whether excess FTC arises or whether a top-up US tax liability exists.
The HMRC guidance on the Temporary Repatriation Facility is published at:
https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals
Yasmin is a US citizen. She moved to the UK from Dubai in 2022. She is not UK-domiciled. She has been a UK resident for three years — she qualifies for the FIG four-year exemption as a first-time UK resident. She holds a US investment portfolio that generates approximately $120,000 in annual dividends and capital gains. She also holds a Dubai rental property that generates approximately $45,000 in annual rental income. Before April 2025, she claimed the remittance basis and kept all foreign income offshore — she paid US tax on it, but not UK tax.
Her pre-April 2025 offshore income pool — accumulated over three years of remittance basis — is approximately $490,000.
Jungle Tax identified the following planning actions for Yasmin. First, she qualifies for the FIG four-year exemption — her foreign income and gains are UK-tax-free until April 2026 (her fourth year of UK residence). During the remaining FIG window, she crystallizes significant gains on her US portfolio — paying US federal capital gains tax at the long-term rate, with no UK CGT. The FTC from prior years’ US tax on portfolio income is modeled for the FIG period, confirming that no excess FTC arises during the exemption period.
Second, Jungle Tax modeled the TRF election for Yasmin’s $490,000 offshore income pool. At the 2025/26 TRF rate of 12 percent, the UK tax cost of electing the full pool is approximately £46,700 (at the prevailing dollar/sterling exchange rate). The alternative — remitting the funds in a future year and paying full UK income tax at 45 percent — would cost approximately £176,000. The TRF election saves Yasmin approximately £129,000 in future UK tax. The TRF election was made before the end of the 2025/26 tax year.
Third, Jungle Tax established the post-FIG annual compliance program — beginning in April 2026, when Yasmin’s FIG window closes, and her US portfolio income becomes fully UK-taxable. The post-FIG compliance program covers both the self-assessment and worldwide compliance) nd the US return, and the FTC optimization to ensure that UK tax on the portfolio income is fully credited against the US liability.
The TRF election saved Yasmin approximately £129,000 in future UK tax. The FIG window crystallization of US portfolio gains saved approximately £24,000 in UK CGT on $120,000 of gains realized during the exemption period. The post-FIG compliance program is in place as of April 2026.
Contact our accountants for the US and UK teams at hello@jungletax.co.uk or 0333-8807974 to discuss your non-dom-to-FIG transition.
The TRF reduced rate applies only during the TRF window — 2025/26 at 12 percent and 2026/27 at 15 percent. After the window closes, remitting pre-April 2025 foreign income to the UK attracts the full UK income tax or CGT rate. A US citizen with a large offshore income pool who does not make the TRF election before the window closes forgoes a significant tax saving. The election must be made on the UK self-assessment for the relevant tax year. An adviser who does not flag the TRF opportunity is not providing complete FIG transition advice.
The FIG four-year exemption covers UK income tax and CGT on foreign income and gains. It does not affect the US tax treatment of the same income. A US citizen who qualifies for the FIG exemption still pays US federal tax on their foreign income during the exemption period — the FIG exemption applies only in the UK. An adviser who does not understand the US side of the transition may incorrectly advise the client that no tax is owed on foreign income during the FIG window, resulting in an underreported US federal return.
The FIG four-year exemption is the most valuable planning window for a first-time UK resident with significant foreign investments. Every qualifying foreign gain crystallized during the exemption period avoids UK CGT at 20 percent. A US citizen in the FIG window who holds a US investment portfolio with significant unrealized gains should work with a specialist to identify which gains to crystallize before the window closes. Deferring gains beyond the FIG window means paying UK CGT on gains that could have been realized tax-free in the UK.
Once the FIG window closes, foreign income becomes fully UK-taxable. For a US citizen, the increased UK tax on foreign income generates additional FTC headroom on the US return — potentially eliminating the residual US tax on foreign income. But where the UK tax rate on foreign income exceeds the US tax rate, excess FTC arises — and that excess may not be fully usable. The adviser models the post-FIG FTC position before the window closes — so the client understands the net tax cost of their worldwide income from April of their fifth year of UK residence.
The HMRC guidance on non-domicile status and UK residence is published at:
https://www.gov.uk/tax-foreign-income/residence
Jungle Tax is a specialist US-UK cross-border tax advisory firm whose team includes IRS Enrolled Agents and UK-qualified tax practitioners who function as accountants for US and UK clients navigating the non-dom to FIG regime transition. We confirm FIG eligibility for every client who became a UK resident within the four-year window. We model the TRF election before it is made — calculating the net UK tax cost, comparing it to the future full-rate remittance cost, and confirming the US FTC position on the designated income. We identify and sequence every asset disposal and restructuring opportunity during the FIG wind
ow — ensuring the highest-value gains are crystallized before the UK tax exemption expires. We establish the post-FIG annual compliance program — coordinating the UK self-assessment and the US federal return from the first year of worldwide UK taxation. We model the FTC position for the post-FIG years — ensuring that UK tax on foreign income is fully and correctly credited against the US liability. You can find further information on our page at https://www.jungletax.co.uk/, or read our guide to HNW families with US and UK assets — estate and succession planning. Contact our team at hello@jungletax.co.uk or call 0333-8807974 today.
The non-dom to FIG regime transition is one of the most significant changes to UK tax for internationally mobile individuals in a generation. For US citizens who were non-doms, it requires accountants in the US and the UK who understand both the new UK regime and the US federal tax system, which applies regardless of UK treatment.
Three points matter most. First, the TRF election window is time-limited — 12 percent in 2025/26, 15 percent in 2026/27, and then closed. A US citizen with a large offshore income pool who does not make the election before the window closes forfeits a material tax saving that cannot be recovered later. Second, the FIG four-year exemption covers UK tax only — US tax on foreign income continues during the exemption period. The FTC must be modeled correctly for the exemption years. Third, the post-FIG FTC position changes materially when UK tax on foreign income begins — the adviser must model the new combined position before the window closes.
Speak to a Jungle Tax adviser today — contact us at hello@jungletax.co.uk or visit https://www.jungletax.co.uk/ to discuss your FIG transition planning.
The Foreign Income and Gains regime is the replacement for the remittance basis of taxation, introduced from 6 April 2025. The FIG four-year exemption applies to individuals who become UK resident for the first time after a period of non-UK residence — specifically, individuals who have not been UK resident in any of the ten tax years immediately before the year of arrival. During the four-year exemption period, foreign income and gains are exempt from UK income tax and CGT. The exemption is available regardless of domicile status — it is based on residency history, not domicile. A US citizen who becomes a UK resident for the first time qualifies for the four-year exemption if they meet the non-residency condition.
The Temporary Repatriation Facility allows individuals who previously claimed the remittance basis to designate pre-April 2025 foreign income and gains — which were sheltered from UK tax under the remittance basis — and pay a reduced UK tax rate on the designated amount. The TRF rate is 12 percent in the 2025/26 tax year and 15 percent in 2026/27. Once designated, the income and gains can be remitted to the UK at any future time without further UK tax. The TRF is a significant planning opportunity for individuals with large offshore income pools — particularly those who hold pre-April 2025 foreign income that they intend to bring to the UK in future years.
No. The FIG four-year exemption is a UK tax exemption. It exempts foreign income and gains from UK income tax and CGT during the four years. It does not affect the US federal tax treatment of the same income. A US citizen who qualifies for the FIG exemption still reports and pays US federal tax on their worldwide income during the exemption period — as required by the US citizenship-based taxation system. The UK tax exemption during the FIG period reduces the FTC available on the US return, because no UK tax is paid on the foreign income during the exemption period.
The TRF election generates a UK tax liability on designated pre-April 2025 foreign income and gains. For a US citizen, that income was already reported on prior US federal returns and taxed in the United States. The TRF payment is a UK tax on income that has already been taxed in the US. The FTC position depends on whether the income is still within the US statute of limitations — and whether the TRF payment can be credited against past or future US returns. A specialist accountant for US and UK models the FTC position before the TRF election is made, to ensure the net cost is fully understood.
After the four-year FIG window closes, foreign income and gains are fully subject to UK income tax and CGT in the year of arising — regardless of whether they are remitted to the UK. This is the same as the worldwide basis that UK-domiciled individuals have always operated under. The transition from FIG exemption to worldwide taxation represents a material increase in UK tax liability for US citizens with significant foreign income. A specialist adviser models the post-FIG tax position before the window closes — confirming the new annual UK liability and adjusting the FTC calculation on the US return accordingly.
Yes — for qualifying foreign gains with significant unrealized appreciation. The FIG four-year exemption means that foreign capital gains realized during the exemption period are UK-tax-free. After the window closes, the same gains are subject to UK CGT at 20 percent.. A US citizen with a US investment portfolio holding unrealized gains should work with a specialist accountant in the US and the UK to identify which gains to crystallize before the window closes — paying only US capital gains tax on realization, with no UK CGT. The adviser sequences the disposals to maximize the UK tax saving within the exemption period.
