{"id":4008,"date":"2026-10-14T11:59:45","date_gmt":"2026-10-14T11:59:45","guid":{"rendered":"https:\/\/relocate.me\/blog\/?p=4008"},"modified":"2026-10-14T11:59:46","modified_gmt":"2026-10-14T11:59:46","slug":"uk-four-year-fig-tax-regime","status":"publish","type":"post","link":"https:\/\/relocate.me\/blog\/money-and-taxes\/uk-four-year-fig-tax-regime\/","title":{"rendered":"The UK’s four-year foreign income and gains regime for new arrivals: what tech workers and founders need to know"},"content":{"rendered":"Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>\n

If you’re considering a move to the UK for a tech role or to grow your business, the four-year foreign income and gains (FIG) regime could offer substantial tax savings. Introduced on 6 April 2025, it allows eligible new residents to claim exemption from UK tax on qualifying foreign income and gains during their first four tax years of UK residence.<\/p>\n

For tech workers and founders, understanding how this fits alongside the rules for salary, share awards and company ownership is essential. Where you perform your work, when your equity accrues and where your company is tax resident can all affect the outcome.<\/p>\n

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Who qualifies for FIG<\/h2>\n

You qualify if you become UK tax resident after at least ten consecutive tax years of non-UK residence<\/a>. Residence is determined under the Statutory Residence Test. Nationality doesn’t matter, so a British engineer coming home after a decade in Singapore qualifies on the same terms as a German engineer arriving for the first time.<\/p>\n

The regime runs for your first four tax years of residence and its use it or lose it. If you skip year three you cannot carry this forward to year five.<\/p>\n

Within that window you can claim relief on foreign income and gains. There is no monetary cap on FIG relief, and you can bring funds into the UK without tax implications.<\/p>\n

You must claim through Self Assessment<\/a>. For 2025\/26, the normal online tax-return deadline is 31 January 2027, while the deadline for making the FIG claim is 31 January 2028.<\/p>\n

Claiming means losing your personal allowance and capital gains annual exempt amount<\/a> for that year. If your income is already \u00a3125,140 or more, the personal allowance has gone anyway, so there is nothing to lose. Below that, run the numbers, because giving up the allowances can cost more than the relief saves, and in that case a FIG claim is the wrong call.<\/p>\n<\/div>\n

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Your salary: overseas workday relief and the cap<\/h2>\n

Employment income has its own relief, overseas workday relief<\/a> or OWR, and this is where the first limit appears.<\/p>\n

If you’re a UK resident and some of your employment duties are performed abroad, the earnings relating to overseas workdays can be relieved from UK income tax. The split is done on a just and reasonable basis, which in practice means apportioning overseas work duties against total work duties.<\/p>\n

The relief is capped per tax year at the lower of \u00a3300,000 or 30% of your qualifying employment income<\/a> which usually translates to 30% of overseas workdays.<\/p>\n

Therefore, if you spend 40% of your time working overseas, the relief will be capped at 30%. The additional 10% overseas workdays will not get any tax relief.<\/p>\n

Note that OWR does not exempt national insurance, which is charged on the full salary.<\/p>\n<\/div>\n

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Equity: where RSUs and options are sourced<\/h2>\n

For most people in tech, the biggest number in any year is an RSU vest, and the rule is simpler than it looks. The UK sources the income from an RSU o evenly across the period from grant to vest<\/a>. The part of that period before you became UK resident is exempt from UK tax. The part after you became UK resident is taxable, but the overseas workday portion qualifies for OWR in the same way as salary.<\/p>\n

The one thing to watch is timing. The relief on the post-arrival share is tested against your qualifying employment income allowance for the tax year in which it was earned, not the year the shares vest.<\/p>\n

What this means in practice is that you need the OWR election in place for each year the equity was accruing, and a large vest will draw on the allowance for those earlier years.<\/p>\n

A worked example<\/strong><\/h3>\n

Anna is a staff engineer with a US-headquartered company. She has lived outside the UK all her life and transfers from the Berlin office to London on 6 April 2026. In 2026\/27 her salary and bonus come to \u00a3400,000. She works 240 days, 96 of them outside the UK at the Berlin and US offices, so 40%. Her overseas workday earnings are \u00a3160,000.<\/p>\n

A tranche of her RSUs, worth \u00a3300,000 at vest, vests on 5 April 2027. It was granted on 6 April 2025 while she was in Berlin, so the relevant period is 730 days, split evenly between the two tax years. The 2025\/26 half, \u00a3150,000, accrued while she was non-resident with no UK duties. It is not UK taxable at all.<\/p>\n

The 2026\/27 half, \u00a3150,000, is UK employment income. 40% of it, \u00a360,000, relates to overseas workdays and qualifies for OWR.<\/p>\n

Therefore Anna has \u00a3220,000 of qualifying foreign employment income for 2026\/27 (\u00a3160,000 salary + \u00a360,000 RSUs).<\/p>\n

Her cap is the lower of \u00a3300,000 and 30% of her qualifying employment income. That base is her salary and bonus of \u00a3400,000 plus the taxable half of the vest of \u00a3150,000 so \u00a3550,000 in total.<\/p>\n

Anna’s cap is \u00a3165,000 (30% of \u00a3550,000). The remaining \u00a355,000 of qualifying income (\u00a3220,000 – \u00a3165,000) earned on days she was physically in Berlin or the US will remain taxable in the UK.<\/p>\n

Had the shares vested a year later, the portion accruing in 2026\/27 would still be measured against her 2026\/27 cap, claimed in the later year’s return, and she’d need the 2026\/27 election in place to claim it.<\/p>\n<\/div>\n

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Founders: dividends and where the company lives<\/h2>\n

The FIG regime is attractive to founders because foreign dividends are not taxable with no cap. Dividends depend on the company being foreign in substance, not just on paper, and that is where founders tend to come unstuck.<\/p>\n

Dividends are only exempt if they come from a non-UK resident company. A company incorporated in the UK is always UK resident. A company incorporated abroad is not automatically foreign: it becomes UK resident if its central management and control<\/a> is exercised in the UK, and HMRC’s view, backed by a century of case law, is that control moves with the person who exercises it.<\/p>\n

A sole founder who relocates to London and carries on running the company from a flat in Shoreditch has very likely brought the company’s tax residence with them. From that point the dividends are UK dividends, and therefore taxable in the UK.<\/p>\n<\/div>\n

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Crypto: why FIG usually doesn’t help<\/h2>\n

A lot of people arriving for tech roles hold crypto, and crypto has unusual situs rules under UK tax law.<\/p>\n

The FIG regime only relieves gains on assets situated outside the UK. HMRC’s view<\/a> is that exchange tokens such as Bitcoin and Ether have no physical location of their own, so they are treated as located wherever their beneficial owner is resident.<\/p>\n

Once you become UK resident, HMRC regards your crypto as a UK asset. It makes no difference that you bought it years ago in Singapore, that it sits on a US exchange or that the keys are in a hardware wallet you keep abroad.<\/p>\n

That view is HMRC’s rather than settled law, and some advisers think it would not survive a challenge in court. But it is the position HMRC will apply when it looks at your return, and relying on a future court case is not a plan.<\/p>\n

What does work is timing. Gains you realise while you’re still non-resident are outside UK capital gains tax altogether. If you have large unrealised gains on tokens you’re going to sell anyway, realising it before you become UK resident puts the whole gain outside the UK net. Once you’ve arrived, every disposal, carries UK tax on the full gain since purchase and if you are making a FIG claim in that year, remember the capital gains exemption goes with it.<\/p>\n<\/div>\n

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Before you land<\/h2>\n

A few things are worth doing before you get on the plane. Check the ten-year test to confirm FIG regime eligibility. Look at the grant dates and vesting schedule on your equity, because the pre-arrival accrual is the most valuable part of all of this and it costs nothing to use. If your role allows it, aim to spend around 30% of your working days outside the UK, because that is the point where every overseas day is relieved and nothing is wasted against the cap. And if you’re sitting on a crypto gain you were going to realise anyway, sell before you become UK resident, because after that date the whole gain since purchase is inside the UK net.<\/p>\n

Emma McDermott ATT is the founder of Global Tax Consulting<\/a>, a UK tax firm for expats and digital nomads. She trained at Deloitte and now advises people moving to and from the UK on residence, tax planning and tax returns. Check out her moving to the UK guide<\/a> or moving to the UK video<\/a> for in-depth guidance.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 5<\/span> minutes<\/span><\/span>If you’re considering a move to the UK for a tech role or to grow your business, the four-year foreign income and gains (FIG) regime could offer substantial tax savings. Introduced on 6 April 2025, it allows eligible new residents to claim exemption from UK tax on qualifying foreign income and gains during their first […]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[80],"tags":[],"class_list":["post-4008","post","type-post","status-publish","format-standard","hentry","category-money-and-taxes"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t