Navigating FIG and TRF: What Americans in the UK Need to Know - Tom LR Griffiths | Tax Advisor and Consultant
Tom LR Griffiths is a tax advisor and consultant, specialising in US expatriate tax matters
Tom LR Griffiths
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Navigating FIG and TRF: What Americans in the UK Need to Know

Tom LR Griffiths Tax Advice

27 Aug Navigating FIG and TRF: What Americans in the UK Need to Know

Posted at 09:38h in UK Tax, US Expats by
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Navigating FIG and TRF: What Americans in the UK Need to Know

The UK’s overhaul of its tax system for non-domiciled individuals (non-doms) has created a seismic shift in how foreign income and gains are taxed. For Americans living in the UK — many of whom have long relied on the remittance basis — the introduction of the Foreign Income & Gains (FIG) and Temporary Repatriation Facility (TRF) regimes from April 2025 means rethinking how they manage their global finances.

Why This Matters for Americans in the UK

For years, non-doms living in the UK could opt for the remittance basis, allowing them to only pay UK tax on foreign income and gains (FIG) brought into the UK. For Americans — who are taxed worldwide by the IRS regardless of where they live — this offered a crucial tool to avoid being double-taxed.

With the remittance basis set to disappear from April 2025, and the new FIG and TRF regimes taking its place, Americans in the UK must now recalibrate.

What Is the FIG Regime?

The Foreign Income & Gains (FIG) regime is a four-year relief for new UK tax residents who have not been resident in the UK for the previous ten years. Under FIG:

  • Foreign income and gains are exempt from UK taxation for the four-year window, regardless of whether they are brought to the UK.
  • UK income and gains remain fully taxable.
  • After the four-year period, individuals become fully subject to UK tax on worldwide income and gains.

For Americans, this means they may still owe US tax on their foreign income, but UK tax may be deferred or eliminated for that period under FIG. Treaty provisions and foreign tax credits will continue to play a vital role in coordinating liabilities between the two countries.

What Is the TRF?

The Temporary Repatriation Facility (TRF) is a two-year window (2025–2026) that allows non-doms to remit previously untaxed foreign income and gains to the UK at a flat tax rate of 12%.

For Americans, TRF presents a strategic opportunity to “clean up” offshore accounts and bring funds into the UK at a reduced tax cost, provided the interaction with US tax rules is carefully managed.

What Should Americans in the UK Be Doing Now?

Here are some practical steps:

  • Check if FIG applies: It only works if you have not been UK tax resident for 10 years.
  • Review your foreign income and gains: Identify where assets sit and whether to realise gains before FIG ends.
  • Plan for TRF: Work out how much you could remit at 12% and how this fits with your US tax reporting.
  • Coordinate with advisers: You’ll need someone who understands both UK and US tax to avoid double-taxation traps.

 

Trusts and Inheritance Planning

Many Americans in the UK use foreign trusts for wealth planning. Under the new rules, FIG may protect trust income and gains during the four-year window, but after that they could become fully taxable in the UK.

Also, inheritance tax exposure could increase significantly once you have lived in the UK for more than ten years. Reviewing trust structures and estate plans now is essential.

A Narrow Window of Opportunity

The combination of FIG and TRF offers Americans in the UK a short-term chance to:

  • Shield foreign income and gains from UK tax for up to four years.
  • Remit historic offshore income at a low 12% rate.
  • Reassess global structures before being fully exposed to UK taxation.

As always with cross-border tax, the details matter. Aligning FIG and TRF with US rules on PFICs, CFCs and foreign tax credits requires careful planning.

Final Thoughts

If you are an American in the UK, now is the time to review your situation. With FIG and TRF coming into force from April 2025, there is a limited window to act. Early planning can make the difference between a smooth transition and an expensive tax bill.

Disclaimer: This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified adviser about your specific circumstances.