Navigating the UK's New FIG Regime: A Swiss Property Investor's Strategic Move

Expert insights on maximizing the four-year tax window for international wealth holders

The UK's abolition of its long-standing non-dom regime has reshaped the landscape for international investors considering British relocation. In its place, the new Foreign Income and Gains (FIG) regime offers a compelling—if narrow—four-year window of opportunity. For high-net-worth individuals like Francine, a Swiss-based property investor with €30 million in assets, understanding how to navigate this transition can mean the difference between an optimized wealth strategy and costly missteps.

The FIG Regime: A Double-Edged Sword

"The FIG regime is actually quite an interesting regime, but it's very short," explains Lisa Cornwell, Partner at PwC Switzerland. For the first four years of UK residency, foreign income and gains remain exempt from UK taxation—a significant advantage for investors with substantial overseas holdings.

However, this regime comes with new strings attached. Unlike the old non-dom rules where offshore assets simply weren't reported, the FIG regime requires full disclosure of all foreign income and gains on UK tax returns. This enhanced transparency reflects the modern reality of international tax cooperation. As Cornwell notes, "We're in the days of super transparency. Tax authorities are using AI more and more."

The critical challenge? After four years, UK residents immediately switch to taxation on worldwide income and gains. This compressed timeline demands forward-thinking strategic planning from day one.

The Immigration Hurdle

Before any tax planning can begin, there's a fundamental question: How does one actually enter the UK? The investment visa route that previously facilitated wealthy relocations no longer exists, with no confirmed replacement yet announced. This creates immediate practical challenges that must be resolved before any move can proceed.

For families like Francine's, where a child's university education drives the relocation decision, alternative immigration pathways must be carefully evaluated and secured before committing to the move.

Central Management and Control: The Hidden Tax Trap

Perhaps the most dangerous misconception among relocating investors is that offshore structures automatically protect foreign income from UK taxation. The reality is far more nuanced.

"If you're the owner and the manager of a business and you go into a country, you're probably going to carry on doing those things in that country," Cornwell warns. UK tax authorities are sophisticated in understanding where business decisions are actually made, regardless of where companies are formally registered.

For Francine, who actively runs a property business through a European holding company, the key question becomes: Where will management decisions actually occur? If she's making strategic decisions from her London home office, the UK may successfully claim taxation rights over business profits—FIG regime notwithstanding.

The solution requires careful documentation of where board meetings occur, where operational decisions are made, and ensuring genuine substance exists outside the UK for foreign holdings.

Strategic Restructuring Opportunities

The FIG regime's four-year window, combined with exemption from UK inheritance tax during this period, creates unique opportunities for wealth restructuring. "Those first four years really do offer some good opportunities for restructuring without triggering a tax in the UK," Cornwell emphasizes.

This might include rebalancing concentrated positions, establishing succession structures, or optimizing asset ownership—all without immediate UK tax consequences. However, the clock starts ticking from day one of UK residency, making pre-arrival planning essential.

The Swiss Exit: Clean Breaks Matter

Switzerland offers relatively straightforward deregistration procedures. By formally notifying local authorities and severing residential ties, investors can establish a clear exit date—crucial for avoiding dual residency complications.

However, coordination with UK entry timing is equally important. The statutory residence test and potential split tax year treatment can significantly impact when UK taxation actually begins. Getting this transition wrong can result in unexpected tax bills in either jurisdiction.

Portfolio Management in a Four-Year Time Horizon

For wealth managers, the FIG regime creates an unusual challenge. "Our time horizon is ten years when we're looking at buying any asset at all within a portfolio," explains Matthew Barrett from Bellecapital. "But what happens in year four?"

This tension between long-term investment principles and short-term tax planning windows requires careful navigation. Do you invest in UK assets that may need unwinding if relocation proves temporary? How do you manage currency exposure when thinking in euros but living in sterling?

Barrett's approach: "Wherever you live in the world, you're going to buy things that are good investments. They're going to be held for ten years, and we can worry about the currency fluctuations on an ongoing basis."

The Case for Swiss-Based Wealth Management

Even when relocating to the UK, maintaining Swiss-based wealth management offers compelling advantages. Switzerland's bilateral agreements with European countries, combined with its political and fiscal stability, provide continuity through what may be a temporary relocation.

"The mobility is probably never been higher amongst these clients," Barrett observes. "Maybe the first country you decide to move to isn't the last country." By maintaining assets in Switzerland—the world's largest offshore booking center—investors avoid the administrative burden of repeatedly moving accounts as life circumstances change.

Flexibility Above All: The "No Regret Moves" Philosophy

Cornwell's overarching advice centers on maintaining maximum flexibility. "We try and keep things as flexible as possible. So no regret moves." This means avoiding structures optimized for one specific jurisdiction that might prove problematic if future relocations occur.

For European investors, offshore bonds might provide portability across jurisdictions. The key principle: understand who owns assets, where they're custodied, and where decisions are made. Clarity in these fundamentals enables effective planning regardless of future residential changes.

The Bottom Line

The FIG regime represents both opportunity and complexity. Its four-year window offers genuine tax advantages for wealthy international investors, but success requires meticulous planning around immigration, central management and control issues, restructuring timing, and long-term flexibility. As UK tax policy continues evolving, working with experienced cross-border advisors becomes not just helpful, but essential to navigating this transformed landscape.