The New FIG Regime – Long Term Resident
This article should be read in conjunction with The New FIG Regime – What is it?
This article should not be regarded as tax advice. If you would like advice on your specific circumstances, please get in touch.
How will individuals who arrived before 2022/23 be affected by the FIG regime?
Individuals outside of their first four tax years of UK residence will need to report their foreign investments on their UK tax return starting from 2025/26.
For those currently claiming the remittance basis, it would be wise to review their portfolio before 5th April 2025 to ensure that it is tax efficient for UK tax purposes.
Foreign income and gains that have been realised under the remittance basis will not be subject to UK tax unless remitted. These individuals may also benefit from using the Temporary Repatriation Facility to remit these funds to the UK and limit their tax exposure.
Planning Opportunities
It may be beneficial to accelerate foreign income and gains, and restructure investments to rebase foreign assets whilst the remittance basis remains available. It is important to wait 30 days after the sale of any assets before repurchasing to avoid any complications with the UK Share Matching Rules and the US wash sale rules.
For US taxpayers, it is important to consider the US tax implications of any income or gains realised before 6th April 2025. If there is no UK tax paid, it is highly likely that full US tax will be applied. Those using the TRF should also consider the potential for double taxation. This is discussed more in this article – The New FIG Regime – Transitional Rules.
We cannot provide investment advice, so it may be beneficial to speak to a financial adviser or wealth manager about how to achieve the above results. We are able to provide contacts for investment professionals with experience in this area upon request.