Are you thinking about moving to the United Kingdom for work in 2026? The tax rules have changed a lot. The old “Non-Dom” system and the remittance basis are gone. Now, there is a new system based on how long you live in the UK. It gives big tax breaks in the first few years to attract people from around the world.
In the 2026/27 tax year, you need a new plan. This is true if you are a high-paid boss or someone who works online from different places. The new 4-Year FIG Regime and the 10-Year IHT Tail are very important. They help you keep your money from other countries safe while you work in the UK, which is one of the best places for finance.
The New Residence-Based Regime: Post-Domicile Planning
From April 6, 2025, the UK stopped using “domicile” for tax. Domicile means where you think your permanent home is. Now, tax depends only on how long you are a resident in the UK.
This change made the Foreign Income and Gains (FIG) regime. It is the main part of tax planning in 2026.
- 4-Year FIG Regime New people coming to the UK can get 100% tax relief on all foreign income and gains for the first four years they are UK residents. This means you do not pay UK tax on money or profits from outside the UK during these four years. Unlike the old rules, you can now bring this money into the UK without paying tax. You can use it to buy a house or invest it freely.
- 10-Year Non-Residency Requirement To get this tax break, you must not have been a UK tax resident for 10 years in a row before you arrive. If you do not meet this, you cannot use the full FIG relief.
- Temporary Repatriation Facility (TRF) If you lived in the UK before 2025 and have old untaxed money from outside the UK, there is a special chance in 2026/27. You can pay tax on these funds at a flat 12% rate. This is much lower than the normal 45% top rate. This helps you bring old money to the UK at a low cost. The TRF is open for a short time. In 2025/26 and 2026/27, the rate is 12%. It goes up to 15% in 2027/28.
- The 10-Year “IHT Tail” This is the hard part you must watch. After you are a UK resident for 10 out of the last 20 years, you become a Long-Term Resident (LTR). When you are an LTR, Inheritance Tax (IHT) applies to your whole world estate, even assets outside the UK.
Even if you leave the UK, your global assets may still face UK IHT for up to 10 years after you go. This “tail” can be shorter if you were resident for fewer years, but it is up to 10 years. This rule makes long-term planning important.
Also Read: Germany Skilled Worker Tax Perks You Must Know in 2026
Employment Incentives & Overseas Workday Relief (OWR)
For many people working across countries, the best advantage in 2026 is the updated Overseas Workday Relief (OWR).
- The 4-Year OWR Extension OWR now lasts for four years, not three like before. This matches the FIG regime. If your job takes you outside the UK for work, you only pay UK tax on the part of your salary for days worked in the UK. Days worked abroad get relief. This is great for people who travel a lot for business.
- The 2026 OWR Cap There is now a limit on how much relief you can get. The relief is capped at the lower of: 30% of your qualifying employment income. £300,000 per tax year. So, even if you work many days abroad, you cannot shield more than this amount from UK tax.
Pro Tip: To get the most from OWR in 2026, ask your employer to use a Section 690 (s.690) notification. This stops too much tax from being taken out of your pay at the start. You avoid paying extra tax and waiting for a refund later.
Thresholds, Personal Allowances, and the “60% Tax Trap”
The new rules give good relief, but normal UK tax bands are still tough because of “fiscal drag.” The Personal Allowance stays frozen at £12,570. As your pay goes up, more of it gets taxed.
Here are the tax bands for 2026/27:
- Personal Allowance: Up to £12,570 – 0% tax
- Basic Rate: £12,571 to £50,270 – 20% tax
- Higher Rate: £50,271 to £125,140 – 40% tax
- Additional Rate: Over £125,140 – 45% tax
Beware the 60% Marginal Rate
There is a tax trap for people earning between £100,000 and £125,140.
For every £2 you earn in this range, you lose £1 of your Personal Allowance. With the 40% higher rate, this makes an effective tax rate of 60% on that part of your income.
Many international workers put money into pensions to lower their “Adjusted Net Income” below £100,000. This helps avoid the trap.
Strategy for 2026 Arrivals: 3 Actionable Steps
Here are simple steps to take if you arrive in 2026.
- The 10-Year Check Look at your past residency using the Statutory Residence Test (SRT). Make sure you were not a UK resident for the last 10 years in a row. If not, you may not get the FIG regime.
- Designate via TRF If you have old offshore gains from before 2025, use the TRF soon. The 12% rate is only for a limited time. It goes up later. Act before April 2027.
- National Insurance (NIC) Planning If you come from a country with a Totalisation Agreement (like the USA or EU countries), see if you can stay on your home country’s social security for up to 5 years. This can save you from paying UK National Insurance.
Optimize Your Global Mobility
The new rules make the UK attractive for international workers in 2026. You get big breaks at the start, but plan for the long term because of IHT rules.
Disclaimer: This article is for information and learning only. Always check with official HM Revenue & Customs (HMRC) sources or a qualified tax expert before you make any money decisions. Tax rules can change, so get personal advice.