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The UK’s New FIG Regime: A Potential One-Year Tax Holiday in Disguise?

So I’ve been thinking? Might the FIG be the juiciest tax holiday that’s ever been created?

For background, the UK government’s newly introduced Foreign Income and Gains (FIG) regime has been billed as a more equitable and modern approach to taxing international wealth. But looking more closely and viewing it from a more practical set of lenses and you’ll notice a striking outcome: for internationally mobile entrepreneurs, the FIG regime could offer what amounts to a one-year tax holiday to realise significant capital gains – including the sale of a business – before departing the UK again, entirely tax-free.

What’s the FIG all about?

At the heart of the new regime is the offer that individuals arriving in the UK after 6 April 2025 will enjoy a four-year window of tax exemption for foreign income and gains – provided they meet the eligibility criteria. Crucially, unlike the remittance basis (which taxed foreign gains when brought into the UK), the FIG regime simply ignores foreign income and gains in that four-year window – regardless of whether the proceeds are brought to the UK or spent abroad.

What’s the juice then?

This creates an obvious planning opportunity for a certain category of internationally mobile individuals, namely those who are planning to sell a business or realise significant gains in the near term. For them, the UK may become an unexpectedly attractive jurisdiction to relocate to for a short period. To be clear, we are not talking about those looking to settle permanently, but rather short-term stays to shelter a future disposal from tax.

Let’s imagine a scenario: An entrepreneur based overseas identifies a potential exit event for their business within the next year or two. They relocate to the UK in 2025 under the FIG regime, enjoy all the benefits of life in London or elsewhere, sell their business within their four-year window, and then leave the UK shortly thereafter, well in advance of being exposed to UK tax on their worldwide income and gains. We are also assuming, for these purposes, that the tax where the business is based is lower, negligible or non-existent, possibly based on their non-residence in that jurisdiction.

From a policy perspective, this raises a serious and legitimate question: will the FIG regime produce the long-term tax revenues the government hopes for or will it simply encourage short-term ‘tax tourism’ by highly mobile individuals? Ultimately, there is currently no requirement for new arrivals to commit to the UK for any meaningful period beyond the four-year window.

What’s next?

This is not to say that the FIG regime is without its advantages. However, if the government’s objective is to attract genuine long-term residents and tax payers who contribute more into the overall tax take, the regime may need further safeguards. Without them, the risk is that the UK simply becomes a short-term tax shelter for business owners who never intended to make the UK their permanent home. How might this enrage other jurisdictions with whom the UK is intended to cooperate on the global mission for tax fairness.

The challenge for policymakers will be to balance the UK’s competitiveness as a destination for international talent with the integrity of its tax system. As always, clever tax planning tends to find opportunity in new rules, and the FIG regime may prove no exception.

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Key UK Immigration Updates for 2025: What You Need to Know

In 2025, the UK government remains focused on refining its immigration framework, prioritising skills-based immigration, streamlining application processes, and strengthening border security. A series of significant updates have been introduced to the immigration system, aiming to meet the evolving needs of the UK economy while maintaining national security. Below are the key changes to the immigration system and their implications for visitors, skilled workers, employers, global talent, families, and UK residents.

1. eVisa and Digital Immigration Status

The UK is moving to a fully digital immigration system, eliminating the need for physical documents like BRC and BRP. Immigration status will be accessible digitally via eVisa platforms.

However, due to ongoing technical issues, the Home Office has extended the grace period for BRPs and BRCs until 1 June 2025 for travel purposes. It is advisable to retain these documents and carry a printout of your visa approval letter, showing the expiry date, as secondary evidence.

While the grace period exists, an estimated 600,000 people still need to create their UKVI account to access their eVisa. If you fall within this group, you are strongly urged to act now by transitioning to eVisa at the earliest opportunity, as well as ensuring your passport details are updated in your UKVI account before travel.

2. Electronic Travel Authorisation (ETA)

The UK has implemented an Electronic Travel Authorisation (ETA) system for visitors from visa-exempt countries, including the USA, Canada, Australia, New Zealand, Japan, South Korea, Hong Kong (excluding BNO passport holders), Malaysia, the UAE, and others.

From 2 April 2025, nationals from EU/EEA countries and Switzerland will also be required to obtain an ETA to visit the UK. The current cost of an ETA is £10, with plans to increase it to £16 in the future. The ETA permits multiple entries to the UK, allowing stays of up to six months at a time for up to two years or until the holder’s passport expires—whichever comes first. Importantly, there is no “6-month in 12 months” rule, each visit simply cannot exceed the six-month maximum.

3. EU Settlement Scheme (EUSS) – Automatic Conversion of Pre-Settled to Settled Status

The Home Office has implemented a streamlined process for eligible holders of EUSS Pre-Settled Status without the need for an application to be submitted. Several thousand individuals have already been successfully transitioned to Settled Status through automated checks, and they will be notified of their status change or provided with further instructions if they are ineligible. This process will expand further throughout the year.

While the conversion will occur in phases, individuals eligible for Settled Status are advised to apply early to avoid delays. A key benefit of obtaining Settled Status is the ability to apply for British citizenship, as applicant must have held Settled Status for at least 12 months before applying (unless married to a British citizen).

4. Skilled Workers

The Skilled Worker visa remains the primary route for employment in the UK, designed to address labour shortages post-Brexit and attract skilled professionals. Operating on a points-based system, it assesses applicants based on qualifications, salary, and English proficiency.

Top Industries for Skilled Worker Visas in 2024

• Healthcare & Social Work – The largest share of skilled worker visas went to nurses, doctors, and social care workers, reflecting the urgent demand in these sectors.
• Information Technology (IT) – A strong demand persists for software developers, cybersecurity specialists, and data analysts, with ongoing skill gaps in the sector.
• Engineering – Although no longer on the shortage occupation list, civil, mechanical, and electrical engineers continue to receive a significant number of visas due to industry demand.
• Construction – Skilled trades such as electricians, plumbers, and project managers remain crucial for ongoing infrastructure projects.
• Education – Teachers, particularly in STEM subjects and special education, have been a focus of skilled worker visa allocations.

The UK prioritises high-demand fields such as healthcare, IT, and education while introducing initiatives to attract artificial intelligence (AI) and life sciences talent. Despite engineering’s removal from the shortage list, the persistent demand suggests ongoing workforce challenges.

Key changes include prioritising care workers in England and increasing the minimum salary threshold for health and education roles from £23,300 to £25,000. The government is also considering requiring industries with high reliance on immigration (such as healthcare, IT and engineering) to commit to domestic workforce training.

With these changes in place, applicants should act promptly to secure their Skilled Worker visas before further adjustments take effect.

5. Sponsor Licence Regulations

Between 2021 and 2024, the number of registered sponsors increased significantly from 38,800 to 110,500. In response, the Home Office has intensified compliance measures, introducing digital audits, risk identification systems, and enhanced scrutiny of suspicious payments.

Employers are now prohibited from passing sponsorship-related fees onto sponsored workers. This includes fees such as Certificate of Sponsorship charges, Immigration Skills Charges, and other associated costs. These changes aim to prevent employers from shifting the financial burden onto the workers they sponsor. Violating these regulations could result in revocation of the sponsor licence and financial penalties. Employers must review agreements and internal policies to ensure compliance and avoid disruptions.

The Home Office has also tightened scrutiny on “self-sponsorship” and start-up company applications, frequently rejecting them on grounds such as genuineness and compliance failures (e.g. right-to-work checks, pension requirements). However, current guidance does not prohibit self-sponsorship, provided a genuine role exists and the company demonstrates financial viability. Both start-ups and established businesses can still succeed in obtaining a Skilled Worker sponsor licence with proper preparation.

6. Global Talent

Global Talent Visa remains a key route for highly skilled professionals in digital technology, arts, culture, and academia. Several changes have been introduced for 2025, including updates to processing times, fees, and endorsement criteria.

Within Arts Council England and its sub-endorsing bodies, evidential requirements have been refined. Applicants must now submit CVs to clarify career stages, meet stricter support letter criteria, and provide clearer evidence of media recognition and international sponsorship. Awards must be for individual achievements, supported by evidence from at least two separate productions. The Prestigious Prizes route continues to exempt applicants from endorsement if they have won internationally recognised awards, with ongoing reviews of the qualifying prize list.

A significant change is the closure of Tech Nation as the endorsing body for digital technology applications from 1 May 2025 due to funding constraints. The government is seeking a successor to maintain continuity. Tech professionals should stay informed and submit applications before this transition to avoid potential disruptions.

7. British Citizenship ‘Good Character’ Requirement

To naturalise as a British citizen a person must, among other things, be of good character. The Home Office strengthened good character policy for citizenship to make it clear that anyone who enters the UK illegally or made dangerous journeys (e.g. small boats or hidden in vehicles) will normally be refused British citizenship, regardless of how much time has passed.

Each citizenship application will continue to be considered on a case-by-case basis and the Home Office may choose to apply discretion on an exceptional basis where there are particularly exceptional, compelling or mitigating circumstances, such as significant contributions to society or where necessary to comply with international obligations.

There is ongoing debate on this issue. Critics argue the policy is discriminatory and are calling for a review, while SNP MP Pete Wishart has proposed an amendment to disregard illegal entry when assessing good character.

8. Family Visa

The minimum income requirement for sponsoring family members to come to or stay in the UK is £29,000, or £88,500 if relying on cash savings, with exemptions for those receiving disability or carer benefits. Initial plans to raise this threshold to £3,500 and then to £38,500 and then to £38,700 in 2025 have been paused. Under the same formula, the required savings would be £101,000 and £112,750, respectively. The savings may be held in a combination of accounts, including those in the sponsor’s spouse’s, or joint name.

The Migration Advisory Committee (MAC) is reviewing the financial requirements, with any future changes depending on its findings and government decisions. Home Office sources have indicated that the review may take approximately nine months, but no firm timeline has been confirmed. Those considering an application are advised to submit before any future increases take effect.

9. Ukraine Visa Schemes

Since the launch of the Ukraine visa schemes, the UK has provided sanctuary to over 300,000 Ukrainians. The Home Office continues to review these schemes to ensure stability for those already in the UK. In 2025, the eligibility criteria under the Homes for Ukraine Scheme were amended to allow parents or legal guardians to sponsor their children to join them in the UK. Additionally, the Ukraine Permission Extension Scheme offers eligible Ukrainian nationals and their immediate family members an 18-month extension of their immigration permission.

There are currently no plans for settlement options, so those on the scheme should explore other immigration routes for permanent residency.

Conclusion

As the UK immigration policies continue to evolve, it is crucial for applicants and organisations to remain informed and proactive in navigating forthcoming changes. With the introduction of digital immigration statuses, revised visa requirements, and potential fee increases, it is advisable to submit applications as soon as eligibility is met. For guidance on how these changes may affect immigration objectives, consulting an immigration lawyer is recommended to ensure compliance and optimise opportunities within this shifting legal landscape.

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Self-Sponsorship Visas: A Pathway for Entrepreneurs to Establish a UK Presence

The UK remains an attractive destination for entrepreneurs seeking to establish and expand their businesses. However, with the closure of the Tier 1 (Entrepreneur) visa and the restrictive requirements of other business immigration routes, many aspiring business owners face challenges in securing a viable immigration pathway.

Self-sponsorship has emerged as a strategic alternative, allowing entrepreneurs to set up and operate a business in the UK, providing long-term stability and growth opportunities.

At Quastels, we advise entrepreneurs on navigating the complexities of self-sponsorship, ensuring that both immigration and business compliance requirements are met.

Understanding Self-Sponsorship

Self-sponsorship enables an entrepreneur to establish a UK company, obtain a Sponsor Licence, and sponsor themselves for a Skilled Worker visa. Unlike traditional visa routes, self-sponsorship does not require:

• A third-party employer to act as a sponsor
• A fixed investment amount, as required for the Innovator Founder visa
• An endorsement from a UK government body or business accelerator.

Instead, this route provides greater flexibility, allowing business owners to take control of their own immigration status while actively managing their company.

Who is Eligible for Self-Sponsorship?

To successfully secure a self-sponsored visa, an entrepreneur must meet key criteria across three areas:

1. Business Viability and Sponsor Licence

• The applicant must establish a genuine UK business that can sponsor skilled workers.
• The business must obtain a Sponsor Licence from the Home Office.
• A credible business plan and operational structure must be in place.

2. Skilled Worker Visa Requirements

• The applicant must hold a skilled role within their business (e.g., Director or CEO).
• The role must meet the minimum salary threshold.
• The applicant must demonstrate English language proficiency at CEFR Level B1 or equivalent.

3. Financial and Operational Readiness

• The business must be financially viable, with the capacity to pay salaries.
• The applicant must show the business has commercial potential and can contribute to the UK economy.

The Self-Sponsorship Process: Step by Step

1. Establishing a UK Business

The first step in self-sponsorship is registering a UK company with Companies House. The business must have:

• A defined commercial purpose and structured business plan
• A UK-based office address
• A UK-resident Director, which can be the applicant or another individual

2. Applying for a Sponsor Licence

To sponsor themselves, the entrepreneur must apply for a Sponsor Licence. The Home Office assesses whether the company:

• Has a genuine need for skilled workers
• Is financially stable and compliant with UK employment laws
• Has appropriate HR and compliance systems in place

A robust business plan and supporting financial documentation are crucial at this stage.

3. Assigning a Certificate of Sponsorship (CoS)

Once the Sponsor Licence is granted, the business can assign a Certificate of Sponsorship (CoS) to the entrepreneur. This document is required for the Skilled Worker visa application and must include:

• The job title and salary
• A description of the role and responsibilities
• Confirmation that the role meets the required skill level

4. Applying for the Skilled Worker Visa

With the CoS in place, the entrepreneur can apply for a Skilled Worker visa. The application typically requires:

• Proof of English language proficiency
• Financial evidence demonstrating the business’s sustainability
• Supporting documents confirming business ownership and sponsorship status

If successful, the applicant is granted a Skilled Worker visa for up to five years, with the possibility of applying for Indefinite Leave to Remain (ILR) thereafter.

Advantages of Self-Sponsorship

• Greater Control and Flexibility
  • Unlike traditional employment-based sponsorship, self-sponsorship allows entrepreneurs to establish and lead their own business without being dependent on an external employer.
• No Fixed Investment Required
  • Unlike the Innovator Founder visa, which requires a minimum £50,000 investment and endorsement, self-sponsorship does not impose a pre-set investment threshold.
• Pathway to Settlement
  • After five years under a Skilled Worker Visa, self-sponsored entrepreneurs can apply for Indefinite Leave to Remain (ILR), offering long-term security in the UK.
• Expansion and Growth Opportunities
  • Once established, the business can sponsor additional skilled workers, enabling further expansion and development.

Challenges and Considerations

• Sponsorship Compliance
  • The Home Office imposes strict compliance requirements for businesses holding a Sponsor Licence. Entrepreneurs must ensure they meet reporting, record-keeping, and employment obligations to maintain their sponsorship status.
• Genuine Business Requirement
  • The business must be actively trading and demonstrate a genuine commercial need for skilled workers. The Home Office closely scrutinises applications to prevent misuse of the visa system.
• Ongoing Visa and Tax Obligations
  • Entrepreneurs must comply with UK tax regulations, employment laws, and immigration rules to sustain their business and visa status.

How Quastels Can Assist

At Quastels, we offer tailored legal support to entrepreneurs navigating the self-sponsorship route. Our services include:

• Advice on structuring and registering a UK business for immigration purposes
• Assistance with Sponsor Licence applications and compliance requirements
• Skilled Worker visa application management and strategic guidance
• Ongoing support to ensure business and immigration law compliance

With extensive experience in both business and immigration law, we help clients secure their UK presence while ensuring regulatory compliance.

Conclusion

Self-sponsorship offers a flexible and structured pathway for entrepreneurs to establish and expand a business in the UK. By obtaining a Sponsor Licence and securing a Skilled Worker visa, business owners can take control of their immigration status while contributing to the UK economy.

Given the complexities of the application process, expert legal guidance is essential to ensure compliance and maximise the chances of success. At Quastels, we provide comprehensive support to entrepreneurs at every stage of their self-sponsorship journey.

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