From April 2025, the UK officially replaced the long-standing non-dom tax system with the new Foreign Income and Gains (FIG) regime. For Australian expats living and working in the UK, this reform directly affects how Australian income, property, investments, and borrowing power are treated.
If you earn in the UK while holding assets in Australia, the FIG regime will influence how much tax you pay, how quickly you grow your savings, and how confidently you can invest in Australian property.
As Australia’s leading mortgage broker for Australian expats, we help Australian expats structure their income correctly and maximise borrowing potential under changing international tax rules.
What Is the FIG Regime?
The FIG regime is the UK’s updated tax framework for individuals with overseas income or assets. It applies to new UK residents or returning expats who have been non-residents for at least 10 years.
Under this system, eligible individuals receive a four-year exemption from UK tax on foreign income and gains. During this period, you may continue to earn income from Australian property, investments, or other assets without triggering UK tax obligations. After the four years expire, normal UK tax rules apply.
Who Can Access the FIG Regime?
You may qualify for the FIG regime if:
- You move to the UK on or after 6 April 2025
- You have not been a UK tax resident for at least 10 consecutive years
- You earn foreign income or hold overseas investments
This commonly includes Australian rental income, dividends, business income, overseas employment income, and capital gains from Australian assets.
Benefits for Australian Expats
The FIG regime provides several advantages that directly support Australian expats planning to buy or invest in property back home:
1. Four Years Without UK Tax on Foreign Income
You are not taxed in the UK on overseas income or capital gains during the four-year eligibility period. This provides greater financial flexibility, especially for expats with Australian properties or investments.
2. More Control Over Asset Planning
The FIG window allows expats to review investments, restructure portfolios, or adjust financial arrangements without incurring UK tax.
3. Simpler Tax Compliance
FIG is designed to be more straightforward than the former non-dom system, reducing administrative complexity for new arrivals.
How the FIG Regime Affects Your Australian Property Goals?
Many Australian expats continue to invest in property back home or plan for future purchases. The FIG rules can influence your strategy in several ways:
- Rental Income
For the first four years, UK tax may not apply to rental income from Australian property, though Australian tax obligations remain. - Capital Gains
Selling an Australian property during your FIG period may fall outside the UK tax net. - Saving Capacity
With reduced UK tax pressure, expats may be in a stronger position to save for a home deposit or manage mortgage repayments.
Understanding how lenders assess foreign income is essential. Policies vary across Australian banks, and expat borrowers often face unique lending conditions. Professional guidance ensures your income is used correctly, and your borrowing power is maximised.
Limitations and Considerations
The FIG regime offers clear benefits, but there are important limitations:
- The exemption lasts only four years
- You must apply annually to maintain eligibility
- After four years, foreign income and capital gains become fully taxable in the UK
- Australian tax obligations still apply
Planning early is important to avoid unexpected tax issues once the FIG period ends.
Why This Matters for Expats Planning to Buy Property in Australia?
The FIG regime creates a short but valuable opportunity to strengthen your financial position while living in the UK. With reduced tax obligations, you may be able to save more, invest with confidence, or secure a mortgage on an Australian property.
However, each lender treats expat income differently, and understanding which banks accept foreign earnings, what documentation is required, and how your tax position influences borrowing power can be challenging. Working with specialists ensures you receive advice suited to your circumstances.
Secure Your Expat Home Loan Today
The FIG regime is an opportunity that requires timely action. Don’t wait until the four-year window starts closing; take control of your property plans and overseas finances now.
Contact us today to speak with Australia’s leading mortgage broker for Australian expats and start securing your ideal home or investment property.
