Navigating the UK’s New FIG Regime: What Employers and International Assignees Need to Know

Under the new rules, UK resident individuals are generally taxed on their worldwide income and gains as they arise, regardless of where those funds are held or whether they are brought to the UK, with relief being available under the FIG regime for qualifying individuals.

For employers with internationally mobile employees, these changes create both opportunities and challenges, so understanding the new framework and planning ahead will be vital.

The Four-Year Relief Window

The FIG regime introduced a four-year relief period for eligible individuals who become UK tax resident after a sufficient period of non-UK residence. During this period, foreign income and gains can be exempt from UK tax for qualifying new arrivals. Once this window ends, individuals become fully subject to UK tax on their worldwide income and gains.

For employers managing international assignments, the timing of moves into the UK is therefore more important than ever. Assignment lengths, start dates and long-term workforce planning should be reviewed carefully to maximise available relief and avoid unexpected tax costs for both employees and organisations.

Overseas Workday Relief: Simpler but Not Unlimited

The new rules also make changes to Overseas Workday Relief (OWR).

Historically, claiming OWR often required detailed bank account structuring and careful monitoring of overseas earnings and remittances. Under the new regime, the process is much simpler, removing the need for complex bank account planning.

While the mechanics of claiming relief have become easier, the relief itself is no longer unlimited. New caps and restrictions apply, meaning employers and employees need to understand the extent of relief available and factor this into assignment cost projections.

In many cases, tax equalisation calculations, assignment budgets and employee communications may require updating to reflect the revised OWR landscape.

Reviewing Tax and Assignment Policies

The introduction of the FIG regime provides a timely opportunity for organisations to review their global mobility and tax policies.

Policies developed under the previous non-dom framework may no longer deliver the intended outcomes. Employers should consider whether existing approaches remain appropriate, particularly where they relate to:

• Tax equalisation and tax protection arrangements
• International assignment durations
• Treatment of foreign income and investment gains
• OWR assumptions
• Employee reimbursements and allowances
• Cost projections for inbound assignees

Updating policies now can help ensure consistency, transparency and cost control.

Increased Compliance Burdens for Employees

Although the new regime is intended to simplify aspects of the UK tax system, tax return compliance may become more demanding for many individuals.

Employees will often need to provide more detailed information regarding their overseas income, gains, residency history and qualification for reliefs.

As a result, employers should consider how best to support their workforce. This may include:

• Providing enhanced tax briefing programmes
• Offering specialist tax advisory support
• Reviewing tax return preparation assistance
• Delivering targeted education on the new rules
• Implementing processes to capture relevant mobility and residency data

Early engagement can help reduce employee uncertainty and minimise the risk of reporting errors.

Planning Is Key

The replacement of the non-dom regime with the FIG regime represents a major change for internationally mobile individuals and the organisations that employ them.

While the new rules create opportunities through the four-year relief period and a simplified approach to Overseas Workday Relief, they also introduce new limitations, compliance obligations and policy considerations.

For employers, proactive planning will be essential to make the most of the reliefs available under the new regime and provide sufficient support to their employees.

Is your organisation ready for the new FIG regime?

If you have internationally mobile employees coming to the UK, now is a good time to review your assignment structures, tax policies and employee support. Our Global Mobility team can help you understand the impact of the FIG regime, identify opportunities to maximise available reliefs and manage the potential tax and compliance implications.

Speak to our Global Mobility team to discuss what the changes could mean for your organisation and your internationally mobile employees.