Govt urged to revise Foreign Income and Gains regime to drive UK investment

The government should make changes to the Foreign Income and Gains (FIG) regime to help drive long-term investment in the UK economy, according to BDO.

The accountancy and business advisory firm urged the government to extend the FIG regime from four to 10 years to improve investment confidence among internationally mobile entrepreneurs.

Introduced in April 2025, the FIG regime allows qualifying new residents to claim tax relief on FIG in the first four years of their UK residency.

However, BDO argued that internationally mobile founders, investors, and senior executives making decisions about long-term residence, business creation, and schooling would see four years as too short a period to provide confidence that the UK is a stable and attractive base.

In its Mid-Market Manifesto, the firm also called for a simplification of the tax regime to promote investment, boost employment, and back entrepreneurship.

“Extending the FIG regime from four to 10 years, alongside the introduction of a flat entry or annual fee would give internationally mobile individuals the confidence to make long-term UK investment decisions, while ensuring the regime makes an explicit contribution to the Exchequer,” said BDO private client services tax partner, Elsa Littlewood.

“A longer-term regime would better match the time horizons associated with relocation, business formation and sustained investment.

“It would also help address the risk that the UK is perceived as a short-term stopover rather than a place to build, invest and remain.

“Ultimately, reforming the FIG regime would help drive growth in the all-important mid-market sector of the UK economy, which is often overlooked and undervalued.

“With the right set of policies, mid-market businesses should continue to play an outsized role in delivering economic growth across the country.”

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