FIG regime 2025/26: should you claim, and how much? Use our FIG + Pension Optimiser
The new Foreign Income and Gains regime can be extremely valuable for people moving to the UK, but a FIG claim is not automatically the right answer. A claim can remove qualifying foreign income and gains from UK tax while also taking away allowances and, in some cases, reducing the earnings on which personal pension contributions can receive tax relief.
That makes the real planning question more useful than a source-by-source tax ranking. First decide whether making any FIG claim is worthwhile at all, then identify whether any qualifying foreign profits are also relevant UK earnings, and finally decide how much of those earnings to relieve if you want to preserve tax relief on a planned pension contribution.
For the wider rules, see our FIG regime ultimate guide and our article on the interaction between FIG and Overseas Workday Relief. Residence remains the starting point, so our UK residence guide for leavers and arrivers is also relevant, while taxpayers dealing with pre-6 April 2025 remittance-basis funds should read our Temporary Repatriation Facility guide.
At a glance
| Question | What matters |
|---|---|
| Should I make any FIG claim? | Compare the UK tax saved with the loss of the Personal Allowance, CGT annual exempt amount and other reliefs that disappear once a FIG claim or OWR election is made. |
| Should ordinary interest, dividends and gains be optimised source by source? | Usually not in a simple case. Once the allowance cost has already been triggered, claiming another qualifying ordinary source normally lowers UK tax or leaves it unchanged. |
| Where can a partial claim genuinely matter? | Qualifying foreign trade or partnership profits can also be relevant UK earnings. FIG relief claimed on those earnings reduces the earnings-based ceiling for personal pension contribution relief. |
| Can I claim only part of a source? | Yes. HMRC states that if a claim is quantified below the eligible amount, only that part is relieved and the balance remains taxable. |
| What else can make any FIG claim expensive? | Foreign capital losses, foreign trading or property losses and overseas property finance-cost relief can be lost when a FIG claim or OWR election is made. |
The real FIG decision: claim or do not claim
For ordinary foreign interest, dividends and capital gains, the biggest decision is usually whether to make any FIG claim in the year. Once a foreign income claim, foreign gain claim or OWR election has triggered the loss of the Personal Allowance and CGT annual exempt amount, adding another straightforward qualifying source normally reduces UK tax further or leaves it unchanged.
Foreign Tax Credit Relief can make an additional FIG claim tax-neutral because the overseas tax may already eliminate the UK liability on that source. That can explain why two filing combinations produce the same UK tax, but it is not normally a compelling planning reason to leave a simple qualifying source outside FIG once the wider claim decision has already been made.
Where partial FIG claims really matter: pension relevant earnings
HMRC's pension rules create a materially different problem when qualifying foreign income is also relevant UK earnings. Relevant UK earnings include profits from a trade, profession or vocation carried on personally or through a partnership, and those earnings normally help determine how much personal pension contribution can receive tax relief.
If FIG relief is claimed on relevant UK earnings, HMRC reduces the earnings used for that pension-relief ceiling by the amount of FIG relief claimed on those earnings, subject to the basic-amount rules. This is therefore a genuine reason to claim only part of a qualifying foreign profit rather than automatically relieving the whole amount.
Can you really claim only part of a source?
Yes. HMRC's guidance states that a FIG claim must be quantified and that, where the amount claimed is lower than the eligible foreign income or gain, only the claimed amount is relieved while the balance remains taxable.
HMRC even gives an example of a £20,000 foreign trade profit on which only £15,000 of FIG relief is claimed, leaving £5,000 taxable. That flexibility is what makes the pension-preserving calculation above possible rather than merely theoretical.
Other costs of making any FIG claim
The Personal Allowance and CGT annual exempt amount are not the only items that can disappear when FIG is used. HMRC also identifies restrictions involving foreign capital losses, foreign trading and property losses, and relief for relevant finance costs of an overseas residential property business.
Those consequences apply because a FIG claim has been made, rather than because a particular ordinary dividend or interest source has been selected. If any of those items are material, a simple claim/no-claim tax comparison is not enough and a full computation is needed before filing.
Foreign tax credits still matter
If foreign tax has already been paid, the no-FIG position may produce Foreign Tax Credit Relief against UK tax on the same income or gain. HMRC is explicit that FTCR cannot also be claimed on the portion of income relieved under FIG, so the overseas tax position remains part of the claim/no-claim comparison.
The calculator therefore asks for foreign tax paid and estimates the credit attributable to amounts left taxable in the UK. Treaty limitations and statutory credit calculations can differ from this screening estimate, particularly for dividends, partnerships and income taxed on a different basis overseas.
What about Overseas Workday Relief?
OWR can create a similar pension issue because foreign employment income relieved under OWR can also reduce relevant UK earnings for pension-relief purposes. It also triggers the same loss of the Personal Allowance and CGT annual exempt amount, which means FIG and OWR should be modelled together where both are relevant.
This calculator deliberately does not attempt to calculate OWR because the workday allocation and financial cap introduce a separate set of inputs. Our FIG and OWR guide explains those rules in more detail and is the better starting point for internationally mobile employees.
What happens on the 2025/26 tax return?
The claim begins on the SA109 residence and FIG pages, where the taxpayer indicates whether a foreign income claim, foreign gain claim or both are being made. The amount of relief is then quantified on the relevant supplementary pages, such as SA103F for overseas self-employment, SA104F for partnership profits, SA106 for most other foreign income and SA108 for foreign capital gains.
For 2025/26 the normal online Self Assessment filing deadline is 31 January 2027, while HMRC's FIG guidance gives 31 January 2028 as the normal deadline for making or amending the FIG claim. That additional claim window is useful, but it should not be treated as a substitute for modelling the pension and loss consequences before the return is filed.
Common mistakes
Optimising ordinary dividends, interest and gains as if every source created a different allowance cost
The main allowance cost is triggered by making the FIG claim, not separately for every ordinary source included in it. In a straightforward case, the useful optimisation is therefore claim versus no claim rather than manufacturing sixteen combinations of simple income types.
Claiming all foreign trade profits without checking a planned pension contribution
Qualifying foreign trade or partnership profits may also be relevant UK earnings for pension purposes. Relieving all of those profits can therefore reduce the maximum personal contribution on which relief is available, even when a partial FIG claim would preserve the planned contribution.
Confusing the relevant-earnings ceiling with the pension annual allowance
The FIG restriction described here concerns the amount of personal contribution that can obtain tax relief by reference to relevant UK earnings. The annual allowance, taper and carry-forward rules are separate tests and can still restrict or charge a contribution that passes the earnings test.
Ignoring foreign losses or overseas-property finance costs
Any FIG claim can affect losses and certain overseas-property finance-cost reliefs, so these amounts can be economically more important than the income tax saved on a small foreign source. A taxpayer with those items should move from the web calculator to a full bespoke computation.
A practical decision sequence
Start by establishing FIG eligibility and calculating the no-claim position, including available Foreign Tax Credit Relief. Then test whether any FIG claim produces a worthwhile saving after the lost allowances and other reliefs, rather than assuming eligibility means a claim should automatically be made.
If a claim is worthwhile, identify whether any qualifying foreign income is also relevant UK earnings and compare the planned personal pension contribution with the earnings that would remain after FIG. Where full relief would cut those earnings below the intended contribution, quantify a partial FIG claim and leave enough profit taxable to support the contribution before separately checking annual allowance and taper.
Official guidance
HMRC's HS266 Foreign income and gains regime helpsheet explains eligibility, claims, lost allowances, pension consequences and Foreign Tax Credit Relief for 2025/26. HMRC's RFIG42100 confirms that claims are quantified source by source and can relieve less than the full amount of an eligible source, while PTM044100 explains how FIG relief on relevant UK earnings reduces the pension contribution relief ceiling.
