UK FIG vs Bulgaria 10%: worked examples at £500k, £1M, £2M

The 4-year UK Foreign Income and Gains (FIG) regime sounds attractive until you do the maths past year four. For HNWIs who arrived in the UK after a long absence, the FIG window offers a temporary holiday from UK tax on foreign income and gains — better than the old remittance basis in some respects, worse in others. But year five is a vertical cliff: full UK rates of 45% income tax, 39.35% dividend tax and 24% CGT hit on day one. Bulgaria's 10% flat personal income tax — the lowest in the EU, eurozone since 1 January 2026, with no cap and no expiry — is the structural answer for anyone with annual income above approximately £150,000. This guide runs three side-by-side numerical comparisons at £500,000, £1,000,000 and £2,000,000 of mixed income, then layers on the Temporary Repatriation Facility, the 10-year UK IHT tail, and the year-5 exit scenario for ex-FIG users. All figures use the 2026/27 UK tax bands and the current Bulgarian PITA rates.

FIG Regime — the Rules in 60 Seconds

Finance (No. 2) Act 2024 codified the FIG regime as the successor to the remittance basis. The high-level test:

• Eligibility: UK tax resident on or after 6 April 2025, and non-UK resident for at least 10 consecutive UK tax years immediately before becoming UK resident.
• Duration: Up to four consecutive UK tax years from the start of UK residence. A 4-year ‘clock’ that starts on day one and cannot be paused.
• Scope: Qualifying foreign income (dividends, interest, employment income from non-UK duties) and qualifying foreign capital gains are exempt from UK tax.
• Forfeit: The UK personal allowance and CGT annual exempt amount are lost in any year a claim is made.
• Year 5: Full UK rates apply on worldwide income and gains. No taper.
• IHT: FIG does not exempt from the new residence-based IHT (long-term UK resident at 10 of 20 years).

For the surrounding context of the non-dom abolition, the 2025 millionaire exodus and the wider menu of EU alternatives (Italy €300k, Cyprus 17 years, Greece €100k), see our UK Non-Dom Abolition guide.

UK Tax Rates 2026/27 — the Numbers Behind the Maths

The 2026/27 bands are the starting point for any comparison.

CGT for 2026/27 is 18% for basic-rate taxpayers and 24% for higher/additional-rate taxpayers on most assets. The CGT annual exempt amount is £3,000. Business Asset Disposal Relief gives 14% on the first £1M of qualifying lifetime gains in 2026/27 (rising to 18% from 6 April 2027). Carried interest changed dramatically from 6 April 2026: it is now treated as trading income subject to income tax (up to 45%) plus Class 4 NIC, with a 27.5% discount for ‘qualifying’ carry — producing an effective top rate of approximately 34.1% for additional-rate taxpayers.

Bulgaria Tax Rates — the Other Side

Bulgaria entered the eurozone on 1 January 2026, removing currency-conversion friction for GBP-EUR mobility. The UK-Bulgaria Double Tax Treaty (1987) caps UK withholding on dividends paid to a Bulgarian resident at 5%, on interest at 0%, and allocates capital gains taxing rights to the country of residence for most assets.

Worked Example 1 — £500,000 of foreign income

Profile: Helen, 47, a senior consultant returning to the UK after 12 years in Singapore. She has:

• £300,000 foreign consulting income (paid via her Singapore Pte Ltd)
• £150,000 dividends from a US-listed portfolio
• £50,000 capital gains realised on rebalancing the portfolio

Year 1 – 4: under UK FIG

Provided Helen makes the FIG claim, her foreign income and gains are UK-tax-free. She forfeits her personal allowance and CGT annual exempt amount, but she has no UK-source income to apply them to anyway. UK tax: £0.

Year 5+: full UK rates kick in

Bulgaria (years 1+)

10-year totals

FIG path: 4 years × £0 + 6 years × £191,300 = £1,147,800.
Bulgaria path: 10 years × £57,500 = £575,000.
10-year saving: ~£573,000

Even with the 4-year tax holiday, Helen pays roughly twice as much in the FIG path because year five through ten taxes catch up. And we have not yet counted UK IHT.

Worked Example 2 — £1,000,000 of foreign income

Profile: Marcus, 51, ex-non-dom returning to the UK after 14 years in Hong Kong. Income mix:

• £600,000 employment income from a Hong Kong holding company (non-UK duties)
• £300,000 dividends from a global equity portfolio
• £100,000 capital gains

Year 1 – 4: FIG — £0 UK tax

Year 5+: full UK rates

Bulgaria (years 1+)

If Marcus structures his income through a Bulgarian EOOD (single-member private company), the employment line becomes a director's-fee + dividend structure at 14.5% combined effective (10% CIT + 5% dividend). If he takes income as a personal freelancer, the rate is 10% PIT minus a 25% expense allowance (effective 7.5%). For simplicity, assume he uses the EOOD route for the employment slice and 10% for everything else:

10-year totals

FIG path: 4 × £0 + 6 × £397,300 = £2,383,800.
Bulgaria path: 10 × £122,000 = £1,220,000.
10-year saving: ~£1,164,000

Worked Example 3 — £2,000,000 of foreign income

Profile: Olivia, 58, founder-investor returning to the UK after 11 years in Switzerland. Income mix:

• £800,000 from a Swiss family-office structure (passive: dividends + interest)
• £700,000 in carried interest from a fund LP position
• £500,000 in trading and investment gains

Year 1 – 4: FIG — £0 UK tax (assuming all foreign-source)

Year 5+: full UK rates — with the new carried interest regime

From 6 April 2026, carried interest is no longer taxed at CGT rates. The new regime treats qualifying carry as trading income subject to income tax + Class 4 NIC, with a 27.5% discount on the amount brought into charge — an effective ~34.1% for additional-rate taxpayers.

Bulgaria (years 1+)

For Olivia, the Bulgarian structure layers a holding company over the existing portfolio. Carried interest received via a corporate vehicle is taxed at 10% CIT + 5% dividend; trading gains via private holding may be exempt or 10%; passive income at 10% PIT or 14.5% combined via EOOD.

10-year totals

FIG path: 4 × £0 + 6 × £662,500 = £3,975,000.
Bulgaria path: 10 × £206,500 = £2,065,000.
10-year saving: ~£1,910,000

And this is before IHT. Olivia's worldwide estate at age 68 (if she stays in the UK and dies) faces 40% UK IHT above the nil-rate band. The same estate in Bulgaria faces 0% (direct line) or maximum 6.6% (non-relatives).

The TRF — a Useful Side Door

For HNWIs who were UK residents under the old remittance basis and accumulated unremitted foreign income or gains pre-6 April 2025, the Temporary Repatriation Facility (TRF) is a three-year settlement window:

The TRF applies to previously claimed remittance basis users only — it is not open to fresh FIG arrivals. For an ex-non-dom planning a Bulgaria move, the TRF is the cleanest way to bring £1M+ of legacy reserves onshore at 12% before departure, then move clean.

CGT Rebasing — Free Uplift for Some

Past remittance-basis users can rebase certain personally-held foreign assets to their market value as at 5 April 2017 for UK CGT purposes, provided the asset was held personally on that date, was outside the UK from 6 March 2024 to 5 April 2025, and is disposed of on or after 6 April 2025. For an HNWI who bought (say) Tesla stock in 2014, the rebasing wipes the gain accrued before April 2017 from UK CGT. Pairing rebased disposals with a FIG claim year and a Bulgarian move post-disposal can compound the relief.

The Hybrid Path — FIG First, Then Bulgaria

For some profiles, the optimal route is to use the FIG window, then leave. Specifically:

• Year 1-4 in UK under FIG: Bring in foreign reserves tax-free (FIG covers them), use TRF to clean pre-2025 reserves at 12%, crystallise rebased gains at 0% UK tax in FIG years.
• End of year 4: Leave the UK before the year-5 cliff. Triggers split-year Case 1 or Case 3.
• Year 5+ in Bulgaria: Resume on 10% Bulgarian PIT, full eurozone EU residency.

The IHT consideration: 4 years of UK residence does not trigger the ‘long-term UK resident’ status (which requires 10 of 20 years). So the FIG-then-exit path keeps the IHT door closed entirely. This is the path we run for many ex-Hong Kong, ex-Singapore, ex-Dubai HNWIs who want a clean repatriation of pre-2025 reserves before settling at Bulgaria's 10%.

For the SRT mechanics of the year-4 exit (including split-year Case 1 trigger date, sufficient ties, UK day-count), see our UK SRT → Bulgaria guide.

FIG and the New UK IHT — the Long Tail

The new residence-based UK IHT, in force from 6 April 2025, makes any UK resident a "long-term UK resident" once they have been UK tax resident in 10 of the previous 20 UK tax years. From that point, their worldwide estate is in scope of 40% UK IHT — and remains so for up to 10 years after they leave the UK, depending on how many UK residence years they accumulated.

FIG users who exit in year 4 escape the long-term resident status (only 4 years counted). But FIG users who stay in the UK for years 5, 6, 7 onwards inch towards the 10/20 threshold. Year 11+ in the UK guarantees an IHT exposure that extends to year 14 (at minimum) of any future departure.

For Bulgarian arrival paths after a UK exit, our UK IHT residence-based planning guide walks through the gift-and-life-cover playbook.

When FIG Wins, When Bulgaria Wins

For most of our enquiries from UK ex-non-doms and returning expats, the structural answer in 2026 is Bulgaria — either direct from day one or after a planned 4-year FIG window. The 10% flat rate, the new eurozone status, and Schengen membership (since 1 January 2025) make Bulgaria the lowest-friction EU destination.

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