Offshore bonds for former non-doms and new arrivals: what the FIG regime does and does not do

What changed on 6 April 2025

Domicile stopped being the test for the remittance basis. In its place, an individual who becomes UK resident after at least ten consecutive tax years of non-residence can claim relief on qualifying foreign income and gains for their first four years of residence (gov.uk guidance on the 4-year FIG regime). Anyone part way through those four years on 6 April 2025 gets the remaining years. The claim is made in the Self Assessment return, source by source, with the amounts quantified, and a separate claim is needed for income and for gains and for each year (RFIG42100).

A claim has a price. For any year in which you claim, you lose the personal allowance, the blind person's allowance, the married couple's and transferable allowances and the capital gains annual exempt amount, and foreign losses of that year cannot be used. The relieved income still counts towards adjusted net income (RFIG43000). For someone with large foreign income the trade is obvious; for someone with modest foreign income and a UK salary it is worth working out both ways.

Why a bond gain is outside the FIG regime

The relief applies to "qualifying foreign income", which ITTOIA 2005 s.845H defines by listing chapters of the Act. From Part 4, the part dealing with savings and investment income, it lists Chapter 2 (interest), Chapter 4 (dividends from non-UK companies), Chapter 7 (purchased life annuities) and Chapter 8 (deeply discounted securities). Chapter 9, gains from contracts for life insurance, is not on the list, and HMRC's manual reproduces the same list (RFIG45100). A chargeable event gain on an offshore bond that arises while you are UK resident is therefore taxed in full, at 20%, 40% or 45% in 2026/27, whether or not you have made a FIG claim for that year.

This is not a new exclusion. Under the old rules a policy gain was always taxable on the arising basis in full, whatever the policyholder's domicile; it was never remittance basis income (RDRM31110). The bond was never a remittance planning tool, and it is not a FIG planning tool. It is a deferral tool, and the reliefs that matter for it are the ones in the next three sections.

Before you arrive: what the bond already gives you

The ordinary bond rules do the work. First, there is no UK tax on the fund and no UK tax on the policyholder until a chargeable event, so a bond bought years before arrival has simply rolled up. Second, when a chargeable event does happen while you are UK resident, the gain is reduced by the proportion of the policy period during which you were not UK resident, counting the overseas part of a split year as non-resident days (ITTOIA 2005 s.528; IPTM3731). Third, the number of years for top slicing relief is reduced by the same years of non-residence, so the relief is worked on the years you were actually here (IPTM3830).

Here is how that looks for someone who bought a bond long before deciding to move. The policy started on 6 April 2016 with a £2,000,000 premium. She became UK resident on 6 April 2026 and surrenders the whole policy on 5 April 2031 for £3,500,000.

The reduction does not depend on a claim under the FIG regime, on how long she stays, or on what she does with the money. It depends on the dates on the policy and the dates of her residence, which is why the policy start date is the single most valuable fact about a bond brought to the UK. The day counts, split years and the rules for policies assigned between spouses are worked through on our page on moving to, returning to or leaving the UK with an offshore bond.

Two cautions. A bond whose investments the policyholder selects is a personal portfolio bond for UK purposes, and those rules apply from the first UK-resident insurance year; our page on the personal portfolio bond rules explains what has to change before arrival. And surrendering before arrival is outside UK tax only for someone who has not been UK resident before; a returning resident can be caught by the temporary non-residence rule described below.

During the four years

While a FIG claim is in force, foreign dividends and interest on a directly held portfolio are relieved, and a bond offers nothing a direct portfolio does not already have. The useful comparison is therefore not bond against portfolio for those four years but what happens in year five, when everything becomes taxable on the arising basis with no further relief. Money that will still be invested then is the money for which the bond's deferral starts to matter, and a bond can be established during the four years so that its policy period is running before the relief ends.

There is one trap in the interaction. If a chargeable event happens in a year for which you have claimed FIG relief, the gain is taxed in full and you have also given up the personal allowance for that year, so a modest gain is taxed from the first pound. Time an event for a year without a claim where you can, or avoid events altogether during the window by keeping within the 5% allowance.

After the four years: the ordinary case for a bond

From year five a UK resident pays tax on worldwide income and gains as they arise. A directly held portfolio pays tax on every dividend, every coupon and every realisation. A bond pays nothing until a chargeable event, lets you draw up to 5% of the premium a year for twenty years without an entry on the return, can be split into segments that are surrendered or given away one at a time, and takes the gain at whatever rate you pay in the year you choose. The case is the same as for any UK resident, and the rest of this site makes it: start with how an offshore bond is taxed in the UK and the comparison of onshore and offshore bonds.

The temporary repatriation facility and the bond

A former remittance basis user can designate pre-6 April 2025 foreign income and gains under the temporary repatriation facility and pay a flat charge, 12% for 2025/26 and 2026/27 and 15% for 2027/28, after which the money can be brought to the UK without further tax (RDRM73400). Designation does not require the money to be remitted, and no credit is given for foreign tax already paid on it (RDRM73340).

A bond gain cannot be designated. It was never remittance basis income, so there is nothing unremitted to designate. What can be designated is the foreign income or gains that paid the premium in the first place, under the mixed fund rules, if they were earned before 6 April 2025 and never taxed in the UK. A former non-dom who funded an offshore bond from untaxed foreign income and now wants to use the proceeds in the UK is therefore looking at the facility for the premium, not for the gain, and the window closes on 5 April 2028.

Inheritance tax: the long-term residence test

Since 6 April 2025 inheritance tax follows residence rather than domicile. You are a long-term UK resident once you have been UK resident in at least ten of the previous twenty tax years (IHTA 1984 s.6A). Until then, a policy with an Isle of Man, Irish or Luxembourg insurer is excluded property and outside the UK estate. After you leave, the status persists for a tail of three to ten years depending on how long you were resident (IHTM47020). For a trust, what matters is the settlor's status, fixed at the settlor's death for the rest of the trust's life where the settlor dies on or after 6 April 2025 (IHTM47050). The Finance Act 2026 added a cap on ten-year and exit charges for certain trusts that held excluded property before 30 October 2024; it is narrow and matters only for very large trusts. Our page on inheritance tax on an offshore bond after April 2025 covers the test, the tail and the transitional rules.

If you leave again

An individual is not liable on a gain that arises in a tax year in which they are not UK resident (IPTM3220), subject to the temporary non-residence rule in ITTOIA 2005 s.465B, which brings a gain back into the year of return where the absence is five years or less. The five-year line, and what counts as a year away, are on the page on moving to or leaving the UK linked above. For someone who may come back sooner than that, the bond can simply be left running.

Questions from new arrivals and former non-doms

Sources and authorities

Read as at 19 October 2026 for the tax year 2026/27. The worked example is hypothetical and uses exact day counts. HMRC manual references are to the Residence and FIG Regime Manual (RFIG), the Residence, Domicile and Remittance Basis Manual (RDRM), the Insurance Policyholder Taxation Manual (IPTM) and the Inheritance Tax Manual (IHTM).

• gov.uk, Check if you can claim the 4-year foreign income and gains regime; HMRC Residence and FIG Regime Manual, RFIG42100 (making a claim), RFIG43000 (consequences of a claim), RFIG45100 (qualifying foreign income).
• ITTOIA 2005 s.845H: qualifying foreign income. s.528: reduction for non-UK policy years. s.465B: temporary non-residents.
• HMRC Residence, Domicile and Remittance Basis Manual: RDRM31110 (policy gains always on the arising basis), RDRM72100, RDRM73340 and RDRM73400 (temporary repatriation facility).
• HMRC Insurance Policyholder Taxation Manual: IPTM3220 (non-residents), IPTM3731 (time apportionment), IPTM3830 (number of years).
• IHTA 1984 s.6A: long-term UK residence. HMRC Inheritance Tax Manual, IHTM47020 (the test and the tail), IHTM47050 (settled property), IHTM47060 (transitional rules). Finance Act 2026 s.74: cap on trust charges for certain pre-30 October 2024 excluded property.

Last updated: 19 October 2026. See our editorial standards for how articles are researched and corrected.