The Finance Act 2025 replaced the remittance basis with a four-year exemption for foreign income and gains, available only to qualifying new residents. The headline framing is straightforward: full exemption on foreign income and chargeable gains for four tax years. The eligibility gateway is narrower than the headline suggests. ITTOIA 2005 section 845B(1), inserted by Finance Act 2025 section 37 with effect from tax year 2025-26, imposes four cumulative conditions that an individual must meet for each tax year in which the relief is claimed. Missing any one of the four conditions fails the gateway entirely; there is no partial-eligibility taper for individuals who fall just short.

This page covers the eligibility gateway in operational detail. For the policy-level overview of the wider non-dom reform, see Non-Dom Reform April 2025 and the FIG Regime for Property Investors. For the SRT cascade that determines UK-residence status in any tax year, see SRT Decision Tree for Landlords. The FIG election mechanics, the per-year claim, and the cost in terms of lost personal allowance and CGT annual exempt amount are covered in the dedicated election-mechanics page that follows this pillar in the Wave 8 cluster.

The s.845B(1) four cumulative conditions, verbatim

Section 845B(1) defines "qualifying new resident" through four cumulative conditions. An individual is a qualifying new resident for a tax year if:

  1. the individual is UK resident for that tax year;
  2. the individual is not disqualified for that tax year (within the meaning of subsection (4));
  3. the individual was not UK resident for each of the 10 tax years before that tax year;
  4. the individual is at least 10 years old at the commencement of that tax year.

Each condition must be satisfied independently. Failing any one disqualifies the individual from FIG relief for that tax year. The conditions are applied tax year by tax year; an individual may qualify in some tax years and not others, although in practice the 10-year prior-non-residence test is the binding constraint that locks in the qualifying-year identification.

Condition (a): UK resident for the current tax year

The FIG relief is for UK residents, not for non-UK residents. The relief operates as a deduction at Step 2 of the income tax calculation under ITA 2007 section 23, reducing the individual's net income that is subject to UK tax. A non-UK-resident individual is not subject to UK income tax on their foreign income or foreign gains in the first place (subject to limited UK-source income exceptions), so the relief is unnecessary for that population. Condition (a) ties FIG to the cohort of arriving UK residents who would otherwise face UK tax on their worldwide income from the year of UK-residence acquisition.

UK residence for s.845B purposes is determined by the Statutory Residence Test at FA 2013 Schedule 45. The SRT cascade applies: automatic overseas tests first, then automatic UK tests, then sufficient-ties test. A tax year resolves to either UK-resident or non-UK-resident as a whole; split-year treatment may apply for income-sourcing purposes within the year but does not change the year's overall residence classification for FIG eligibility.

Condition (b): not disqualified per s.845B(4)

Section 845B(4) defines "disqualified" narrowly. An individual is disqualified for a tax year if they would be regarded as a member of the House of Commons or House of Lords for any part of that tax year (per section 41 of the Constitutional Reform and Governance Act 2010). The carve-out is targeted at sitting UK parliamentarians.

Some commentary frames condition (b) as a broader "previously claimed FIG or remittance basis" exclusion. The verbatim s.845B(4) text does not support that framing; the disqualification is parliamentary only. The historic-claim concept that some sources allude to is embedded elsewhere in the FIG architecture (condition (c) already prevents individuals with a recent UK-residence record from re-claiming), but the formal "disqualified" status at s.845B(4) is specific to House of Commons and House of Lords members.

Condition (c): not UK resident in any of the 10 tax years before the current one

The structural gateway. The individual must have been not UK resident in each of the 10 tax years immediately preceding the qualifying tax year. The test runs on full tax years; partial-year residence or split-year treatment in any of the 10 prior years counts as a UK-resident year and breaks the chain.

The 10-year window slides forward year by year. For an individual qualifying in 2025-26, the 10 prior tax years run from 2015-16 to 2024-25 inclusive. For an individual qualifying in 2026-27, the window shifts to 2016-17 to 2025-26 inclusive. Sessions advising should run the calculation against the individual's specific residence history under SRT for each of the 10 prior years; an oversight of a single partial-year of UK residence in any of the 10 years (typically a split-year departure that the client misremembers as a clean break) fails the test entirely.

The 10-year requirement is binary. There is no scaled-down 1-year or 2-year FIG window for individuals with 8 or 9 prior non-residence years; the post-FA-2025 regime does not provide a partial-eligibility taper for shorter absences. An individual with 9 years away and 1 year of UK residence within the 10-year window fails outright and gets zero relief; their first UK-resident year is taxed under the standard arising basis. For genuine new residents (10+ years away) the relief is full and worth the complexity of the gateway; for individuals with shorter absences the regime offers nothing.

Condition (d): at least 10 years old at commencement of the tax year

The age-floor. The individual must be at least 10 years old at the start of the qualifying tax year (6 April). An individual aged 9 or below at that date is not eligible regardless of the residence-history test. The age-floor is operationally significant in three specific contexts: trust-of-minor structures where a young beneficiary holds foreign assets that would otherwise qualify under the trust's FIG profile; family-investment-company succession planning involving young growth-share recipients; and child-returnees who accompany family back to the UK and would, on the residence-history test alone, qualify for FIG.

The relief becomes available from the first tax year in which the child is 10 at commencement. For a child born on 1 July 2018, the first qualifying tax year is 2028-29 (age 10 at 6 April 2029 onwards; technically the child is 10 from 1 July 2028, but condition (d) requires age 10 at the START of the tax year). The under-10 carve-out is consistent with the s.6B (young-person variation of the IHT LTR test) carve-out at IHTA 1984 s.6B(3), which similarly removes under-1s entirely; the two regimes both calibrate the test for younger cohorts.

Worked example: a UK national returning after 12 years overseas

Take a hypothetical landlord, Olusegun, a UK national who left the UK on 31 March 2014 (the last day of the 2013-14 tax year) for a 12-year secondment in Singapore. Under SRT he has been non-UK resident throughout 2014-15 to 2025-26 inclusive (12 consecutive non-UK tax years). He is moving back to the UK on 6 April 2026 to take a London role, and expects to be UK-resident under SRT for 2026-27 onwards. He owns a UK BTL portfolio (managed under the NRL scheme throughout his absence), a Singapore primary residence, and a Singapore investment portfolio worth £900k generating £42k a year of foreign dividends, interest, and rental income.

Apply s.845B(1) to 2026-27 as the qualifying tax year. Condition (a): UK resident for 2026-27 (yes, per SRT). Condition (b): not disqualified (Olusegun is not an MP or member of the Lords). Condition (c): not UK resident for each of the 10 tax years before 2026-27, i.e., 2016-17 to 2025-26 inclusive (yes, all 10 were non-UK years). Condition (d): at least 10 years old at 6 April 2026 (yes, he is 47). All four conditions satisfied. Olusegun is a qualifying new resident for 2026-27, and the four-year FIG window runs 2026-27 to 2029-30 inclusive.

For each of those four tax years, Olusegun can make a FIG claim under s.845A. The £42k of Singapore-source foreign income is fully exempt from UK income tax in any year he claims; the relief operates as a Step 2 deduction under ITA 2007 s.23. The UK BTL income remains subject to UK tax under the arising-basis rules (FIG covers only foreign-source income; UK rental is UK-source).

Cost-benefit of claiming each year. Claiming FIG forfeits Olusegun's personal allowance and CGT annual exempt amount for that tax year. With £42k of foreign income against current personal allowance of £12,570 and CGT AEA of £3,000, the forfeited allowance is worth £12,570 + £3,000 = £15,570 of potential UK-tax shelter at marginal rates. The FIG saving on £42k of foreign income at higher-rate 40% is £16,800. Net positive £1,230 per year, four years, £4,920 total. The decision is marginal because the foreign income is modest; for an individual with £200k+ of foreign income the saving would be dominant. Sessions advising should run the cost-benefit annually rather than assuming FIG is universally worth claiming.

If Olusegun had returned to the UK in 2025-26 instead of 2026-27, the qualifying-year analysis would still work: 2015-16 to 2024-25 are the 10 prior tax years, all non-UK; he qualifies in 2025-26 and the four-year window runs 2025-26 to 2028-29. If he had returned in 2023-24 (only 9 years away), s.845B(1)(c) fails and he gets zero FIG relief; the standard arising basis applies from his first UK-resident tax year. The 12-month difference in return timing matters substantially.

The four-year window per s.845B(2)

Once an individual qualifies as a qualifying new resident for a tax year, the relief is available for up to four tax years: the qualifying year itself plus the next three tax years. Section 845B(2) provides the duration. The four years run consecutively from the qualifying year regardless of any change in the individual's circumstances (subject to remaining a qualifying individual under the cumulative s.845B(1) test in each subsequent year).

The relief is per-year claim. An individual may claim FIG for some years within the four-year window and not others; failing to claim in any year forfeits that year's relief and the lost year does not extend the window. Sessions advising should run the cost-benefit analysis year by year: claiming FIG removes the personal allowance and the CGT annual exempt amount for that year (same architecture as the historic remittance-basis claim), so the relief is only worth claiming where the foreign-income and gains for that year exceed the lost allowances.

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The s.845B(3) retrospective treatment for 2022-23 to 2024-25

Section 845B(3) extends "qualifying tax year" status to certain tax years from 2022-23 to 2024-25 under specified circumstances. The retrospective treatment catches individuals whose qualifying year (the first tax year of UK residence after the 10-year gap) falls within that earlier window. The four-year FIG window is calculated from the qualifying year; for an individual whose qualifying year is 2023-24, the FIG-eligible years are 2023-24, 2024-25, 2025-26, and 2026-27.

The retrospective treatment is narrowly defined and depends on the specific s.845B(3) conditions. Sessions should verify against the section text at write time. Note that only the FIG-eligible years from 2025-26 onwards can be claimed under the FIG mechanics; the pre-2025-26 years were operated under the historic remittance basis (or the standard arising basis, depending on the individual's claim history), with the Temporary Repatriation Facility (FA 2025 s.41) available for designating pre-2025-26 unremitted foreign income at the 12% / 12% / 15% rates over the 2025-26 to 2027-28 window.

The SRT chain-break interaction with split-year treatment

Split-year treatment under FA 2013 Schedule 45 Part 3 (Cases 1 to 8) treats certain tax years as containing both a UK part and an overseas part. The split mechanic operates for income-sourcing purposes within the year; the tax year as a whole still resolves to either UK-resident or non-UK-resident under the basic SRT cascade.

For section 845B(1)(c), the 10-year prior-non-residence test runs on full tax years. A tax year that resolves to UK-resident under SRT (even where split-year treatment applies for income-sourcing) counts as a UK-resident year and breaks the consecutive chain. The interaction is a frequent oversight in advice work: an individual who departed the UK partway through 2015-16 under Case 1 split-year treatment is UK-resident for 2015-16 as a whole; the year counts as one of the 10 prior tax years against the FIG test for a 2025-26 qualifying year. The same individual who departed cleanly at the end of the 2014-15 tax year (so that 2015-16 was their first full non-UK year) qualifies; the 12-month difference in departure timing can be the difference between zero relief and four years of foreign-income exemption.

Comparison vs the historic remittance basis

The FIG regime differs from the historic remittance basis (ITA 2007 section 809B, no longer claimable from 2025-26 per FA 2025 s.40) in three structural ways. First, the eligibility gateway. The remittance basis was available to UK-resident non-domiciled individuals regardless of prior non-residence history. FIG requires the 10-year prior-non-residence test. Second, the duration. The remittance basis was indefinite (subject to the remittance-basis annual charge of £30,000 to £90,000 for long-term users). FIG is limited to four tax years per qualifying period; there is no extension mechanism. Third, the scope of relief. The remittance basis exempted foreign income and gains only to the extent they were not remitted to the UK (the remittance test was where the planning value lived). FIG fully exempts qualifying foreign income and gains for the four-year window with no remittance test; the foreign-income can be received in the UK without triggering any UK tax on the FIG-exempt slice.

The Temporary Repatriation Facility at FA 2025 section 41 sits alongside FIG to handle the legacy population: individuals who claimed the remittance basis pre-2025-26 and have unremitted foreign income still offshore can designate that capital under TRF at the favourable rates rather than face the higher arising-basis treatment on later remittance. TRF and FIG are alternative routes for different cohorts; an individual who qualifies for FIG (10-year prior-non-residence) does not need TRF because their post-2025-26 foreign income is FIG-exempt.

How FIG fits with the wider Finance Act 2025 reform package

The FIG regime is one of four headline pieces of the FA 2025 non-dom reform. The four pieces are: FIG for new arrivals (ITTOIA 2005 ss.845A to 845J); TRF for legacy non-dom remittance-basis users (FA 2025 s.41 + Sch 10); CGT rebasing election for narrow eligible non-doms (FA 2025 s.42 + Sch 11); and the residence-based IHT regime (IHTA 1984 s.6A + s.48ZA + s.18 amendments, see the IHT cluster pages in this Wave 8 series). The four operate on different tax bases (income tax and CGT vs IHT) and different mechanics (exemption vs designation vs rebasing vs LTR-status-test), but they collectively replace the historic non-dom architecture.

For sessions or readers working through the wider reform, the order of operation typically runs: determine UK-residence status and prior-non-residence history under SRT; apply s.845B(1) to identify whether the individual qualifies for FIG and which four-year window applies; apply IHTA s.6A to identify long-term-resident status for IHT purposes (a separate test using the same SRT residence concept, but with a 10-of-20 architecture rather than 10-consecutive); apply TRF and CGT rebasing where relevant for pre-2025-26 offshore positions. The FIG eligibility test sits at the gateway of the income-tax-side analysis.

What this page does not cover

This page is the FIG eligibility pillar. It does not cover: the FIG election mechanics, the per-year claim, the loss of personal allowance and CGT AEA (the dedicated election-mechanics page covers); the year-5-onwards arising-basis cliff and post-window planning (a separate post-window page covers); TRF in detail (the TRF cluster covers); CGT rebasing (the dedicated rebasing page covers); the IHT LTR test for individuals (the s.6A pillar covers); the offshore-trust s.48ZA mechanics (the EPT companion covers); the s.18 spouse exemption (the spouse-exemption page covers); the SRT day-count tests in detail (the SRT pillar covers).

Statutory and HMRC sources cited above: ITTOIA 2005 section 845A; ITTOIA 2005 section 845B; Finance Act 2025 section 37; Finance Act 2025 section 40; FA 2013 Schedule 45 (Statutory Residence Test); ITA 2007 section 23; gov.uk: Changes to the taxation of non-UK domiciled individuals; HMRC Residence, Domicile and Remittance Manual.