Moving to the United Kingdom marks an exciting new chapter in your life. The country offers vibrant culture, diverse opportunities, and a rich history. However, navigating its financial landscape can be a formidable challenge. The UK tax system is notoriously complex. Furthermore, monumental changes effective from 6 April 2025 have completely reshaped the rules. These reforms fundamentally alter how international individuals are taxed. This guide provides a comprehensive, up-to-date overview of the new system. We will break down everything you need to know. We aim to equip you with the essential knowledge to confidently manage your obligations. Understanding these new regulations is the first step toward financial clarity. This comprehensive guide will help you understand UK taxes for new immigrants. It ensures you are well-prepared for your new life in the UK.

A Revolution in UK Taxation: The End of the Non-Dom Era

The UK tax system underwent its most significant transformation in centuries on 6 April 2025. The government completely abolished the long-standing non-domiciled tax regime. Previously, your “domicile,” or permanent home, determined your tax liabilities on foreign income. This concept has now been replaced with a new framework based entirely on tax residence. This is not a minor tweak; it is a fundamental redesign of the entire system. This change impacts every international person moving to the UK. It requires a complete re-evaluation of financial planning strategies that may have been valid for decades. Understanding this shift is the most critical aspect of managing your finances. This new residence-based system is the new reality for

UK taxes for new immigrants.

Your First Four Years: The New FIG Regime

Understanding the Foreign Income and Gains (FIG) Regime

The government has introduced a new, highly attractive regime for qualifying new residents. It is called the Foreign Income and Gains (FIG) regime. This new system provides a complete exemption from UK tax on your foreign income and gains for your first four years of UK residence. To be eligible, you must become a UK resident after a period of at least 10 consecutive years of non-UK residence. During this four-year window, you can bring these foreign funds into the UK without incurring any tax charge, a major advantage over the old rules. This generous introductory offer is a cornerstone of the new system for UK taxes for new immigrants. It is vital to understand how the new system of UK taxes for new immigrants works.

The Catch: Claiming FIG and Losing Allowances

This generous relief comes with a significant trade-off. When you make a claim for the FIG regime in a tax year, you automatically forfeit key tax-free allowances. Specifically, you will lose your annual Income Tax Personal Allowance, which is £12,570 for the 2025/2026 tax year. You also lose the Capital Gains Tax (CGT) Annual Exempt Amount, set at £3,000 for the same year. Therefore, you must perform a careful calculation each year. The UK tax saved on your foreign income must be greater than the extra tax you will pay on your UK income from losing these allowances. This decision is a central part of planning for UK taxes for new immigrants. You must make the claim annually on a Self-Assessment tax return.

The Core System: Understanding UK Taxes for New Immigrants

Income Tax and National Insurance Explained

Once you are subject to UK tax, you will primarily encounter Income Tax and National Insurance Contributions (NICs). Income Tax is charged on your total income above your Personal Allowance of £12,570. For the 2025/2026 tax year in England, Wales, and Northern Ireland, the rates are 20% (basic), 40% (higher), and 45% (additional). Scotland has its own set of rates and bands. National Insurance is a separate social security tax that funds state benefits like the state pension. Employees pay Class 1 NICs, typically at a main rate of 8%, deducted directly from their salary. These direct levies are the foundation of UK taxes for new immigrants. Mastering the rules for these UK taxes for new immigrants is absolutely essential for compliance.

Capital Gains Tax (CGT) on Your Assets

You must pay Capital Gains Tax (CGT) when you sell or ‘dispose of’ an asset that has increased in value. This applies to assets like shares, investments, or a second home. For the 2025/2026 tax year, you have a tax-free allowance, called the Annual Exempt Amount, of £3,000. You only pay CGT on gains above this amount. The rate you pay depends on your income tax band and the type of asset. For higher-rate taxpayers, the rate is 24% on gains from residential property and other chargeable assets. Basic-rate taxpayers pay 18%. These rules are an important component of UK taxes for new immigrants. Proactive planning for UK taxes for new immigrants must include a strategy for managing potential capital gains to utilise allowances effectively.

Inheritance Tax (IHT): A New Era for UK Taxes for New Immigrants

The rules for Inheritance Tax (IHT) have been completely overhauled. Previously, IHT liability depended on your domicile status. From 6 April 2025, it is based on a residence test. You become a “long-term resident” for IHT purposes if you have been resident in the UK for at least 10 of the previous 20 tax years. Once you meet this test, your entire worldwide estate becomes subject to UK IHT at a rate of 40% on assets above the £325,000 nil-rate band. Furthermore, a new “IHT tail” means that even after you leave the UK, your worldwide assets can remain in the IHT net for up to 10 years. This radical change significantly impacts long-term UK taxes for new immigrants.

Don’t Forget Council Tax

In addition to central government taxes, you must also pay Council Tax. This is a local tax levied by your local council to pay for services like rubbish collection, policing, and fire services. The amount you pay depends on the valuation band of your property and the rates set by your local council. A full bill is based on at least two adults living in the home. However, there are important discounts and exemptions available. Most notably, full-time students are generally disregarded for Council Tax purposes, meaning a property inhabited solely by students is fully exempt. This local levy is an unavoidable part of the system of UK taxes for new immigrants, so you should factor it into your budget.

Essential First Steps for Managing UK Taxes for New Immigrants

Determining Your Status with the Statutory Residence Test (SRT)

Your first and most crucial step is to determine your UK tax residence status. The Statutory Residence Test (SRT) is a detailed set of rules that decides whether you are a UK resident for a tax year. The outcome of this test is fundamental, as it dictates how the entire UK tax system applies to you. The SRT has three parts: the automatic overseas tests, the automatic UK tests, and the sufficient ties test. If you meet one of the automatic overseas tests, you are definitely a non-resident. If not, but you meet an automatic UK test, you are a resident. Otherwise, your status depends on combining days spent in the UK with your connections, or “ties,” to the country. Your SRT result is the gateway to understanding your obligations regarding

UK taxes for new immigrants.

Getting Your National Insurance Number (NINO)

If you plan to work in the UK, you must have a National Insurance number (NINO). This is your unique personal account number for the UK’s social security system. It ensures that your National Insurance contributions and tax payments are correctly recorded against your name. You can only apply for a NINO once you are physically present in the UK, and the application is completed online through the official government website. You will need to prove your identity using documents like your passport or a biometric residence permit (BRP). You can start work before your NINO arrives, but obtaining one is a non-negotiable step for handling UK taxes for new immigrants. This is a key practical requirement for dealing with UK taxes for new immigrants.

Registering for Self-Assessment

Many new arrivals will need to register for Self Assessment with HM Revenue & Customs (HMRC). This is the system used to report and pay tax on income that is not taxed at source, such as from self-employment or renting out property. You must also register if you wish to claim relief under the new 4-year FIG regime. The deadline to register is 5 October, after the end of the tax year for which you need to file a return. Once registered, HMRC will issue you a Unique Taxpayer Reference (UTR), a 10-digit number you will use to file your tax returns. Self-assessment is the primary method for reporting and settling many UK taxes for new immigrants.

Strategic Planning for UK Taxes for New Immigrants

For those who lived in the UK under the old non-dom rules, the government has provided important transitional reliefs. The Temporary Repatriation Facility (TRF) offers a limited-time window to bring previously untaxed foreign income and gains into the UK at a reduced tax rate of 12% for two years, then 15% for one year. Additionally, some individuals can rebase the value of their foreign assets to their April 2017 value for CGT purposes, effectively wiping out historical gains. It is also crucial to understand Double Taxation Agreements (DTAs). These are treaties between the UK and other countries that prevent you from being taxed twice on the same income. This is a vital tool for managing

UK taxes for new immigrants.

The 2025/2026 tax landscape represents a new world for international individuals in the UK. The shift from a domicile-based to a residence-based system is a complete paradigm change. It introduces a generous but strictly limited four-year tax holiday on foreign income, which creates a critical window for strategic financial planning. After this period, you become fully integrated into the UK’s comprehensive tax system. The complexity of these new rules, combined with the strict deadlines and reporting requirements, makes professional advice more valuable than ever. By understanding these regulations and planning proactively, you can navigate your new financial future with confidence and successfully manage UK taxes for new immigrants.