NRIWallah team
Updated
November 2026
· 6 min read
The short answer
Many UK NRIs have heard that “non-dom status has gone”, often from friends or colleagues who left the UK because of it. What ended is the old remittance basis. It let some UK residents whose permanent home was outside the UK pay UK tax on foreign income and gains only if they brought the money into the UK. It ended on 5 April 2025.
From 6 April 2025, the UK uses the Foreign Income and Gains (FIG) regime for new UK residents. It can exempt qualifying foreign income and gains from UK tax for up to four tax years, but only after a long break from UK residence. It is a very different test. It does not turn on being Indian, holding Indian assets, or describing yourself as non-dom.
The difference matters to an NRI with Indian rent, NRO interest, dividends or investments. The UK residence test helps establish whether you are UK resident at all. Once you are resident, this page explains what then happens to income and gains outside the UK.
Domicile, residence and non-dom: three different ideas
Residence normally decides whether the UK taxes your worldwide income in a tax year. It is mainly a day-count and ties test. Domicile was a separate legal connection to the country you treated as your permanent home. It was not citizenship, passport, ethnicity or where you were born. Someone born in India could become UK-domiciled; someone with a British passport could have a different domicile.
Before April 2025, a UK resident who was non-UK domiciled could sometimes choose the remittance basis. Foreign income and gains stayed outside UK tax while they remained outside the UK. Bringing or using the money in the UK could make it taxable. A claim usually meant giving up the Personal Allowance and the capital gains annual exempt amount (not when unremitted foreign income and gains were under £2,000 for the year). People resident for at least 7 of the previous 9 tax years generally paid a £30,000 annual charge, rising to £60,000 after 12 of the previous 14 years, and after 15 of the previous 20 years they were treated as UK-domiciled and could not claim it at all. The old rules were not simply “money in India is untaxed”.
That choice has gone for new tax years. Historic remittance-basis money has transitional rules, which are not covered by the tool above because mixed funds, trusts and the Temporary Repatriation Facility need individual analysis.
What replaced it: four years of FIG relief
You can generally claim FIG relief for your first four UK-resident tax years if you were non-UK resident for the previous 10 consecutive tax years. A person moving from India to the UK after a decade away may meet that history test. A person who has been UK resident for years does not become eligible simply because they retain an Indian domicile or move money through an Indian account.
For a qualifying year, you can claim relief for chosen foreign income and gains. The money can be brought to the UK without the old remittance-basis distinction. However, a claim is made in Self Assessment and has a cost: for that year you usually lose your UK Personal Allowance and the annual exempt amount for capital gains tax. HMRC’s FIG guidance and its Self Assessment helpsheet (HS266) set out the categories and return entries.
That is why there is no universal answer to “should I claim?” A small amount of foreign income may save less tax than the Personal Allowance you give up. A larger foreign gain may make the result look different again. The comparison tool illustrates that trade-off with 2026/27 rates, but leaves out many facts that a return needs.
A simple calculation
Take someone in England with £50,000 of UK employment income, £20,000 of foreign rental profit and £10,000 of foreign gains. On the ordinary arising basis, the foreign income joins UK income and capital gains tax normally starts after the £3,000 annual exempt amount: about £15,432 of income tax plus £1,680 of capital gains tax, £17,112 in all. With a full FIG claim, the £20,000 foreign income and £10,000 foreign gains can be relieved if the person qualifies, but the £12,570 Personal Allowance is lost, leaving about £12,460 of tax on the UK salary. The claim saves about £4,650 before any credit for Indian tax.
The result can turn the other way. With £30,000 of UK salary and £2,000 of foreign rent, a claim raises UK tax by about £2,100, because the lost Personal Allowance is worth more than the tax on the rent. Rental profit here means rent after costs: our guide to Indian rent taxed abroad explains how the UK works it out.
The calculator puts those figures side by side. It uses the £12,570 Personal Allowance, £37,700 basic-rate band, £3,000 annual exempt amount and the 18%/24% ordinary CGT rates for 2026/27. It deliberately does not calculate Indian tax or treaty relief: foreign tax credit can change the cash result, as our DTAA estimator explains. It also excludes dividends, savings interest and Scottish rates, which follow different calculations.
What changes for Indian income
The UK’s test is about the source and type of income, not the country where the account sits. Indian rent, interest, dividends and gains can all need UK consideration once you are UK resident. Indian tax deducted at source may still be relevant: the India-UK treaty can often give credit against UK tax on the same income, subject to limits. The UK NRI tax calculator shows how that credit works on Indian rent and interest.
FIG relief does not decide your Indian residence or Indian tax bill. If you are moving back, the Indian RNOR period can separately keep much foreign income outside Indian tax for a time; the RNOR tracker works through that different test. Nor does FIG settle inheritance tax. The UK’s inheritance-tax residence test has separate rules, and for Indian property the 1956 UK-India estate duty treaty can still matter; both are covered in the inheritance tax guide.
Points to check before filing
- Count your UK residence history tax year by tax year. Do not substitute domicile, nationality or a visa for the ten-year FIG condition.
- Separate foreign income, foreign gains, dividends and interest. They do not all use the same tax calculation.
- Keep the Indian tax records that support any foreign tax credit claim, including TDS certificates and the Indian return.
- If you used the remittance basis before April 2025, keep historic funds separate in your records. The transitional rules may matter when money comes to the UK.
- Take advice before making a claim where the amounts are material, there are trusts or mixed funds, or the fourth year is approaching.
The calculator and this article are general education, not personal tax advice. HMRC’s guidance on foreign income is the starting point, and a qualified UK tax adviser can apply it to your facts.
