October 1, 2026/
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For many former remittance basis users, substantial foreign income and gains accumulated before 6 April 2025 remain outside the UK.
Bringing those funds to the UK would ordinarily risk triggering UK tax under the historic remittance basis rules. The Temporary Repatriation Facility (TRF) creates a limited three-year opportunity for eligible individuals to designate qualifying overseas capital at a reduced tax rate and subsequently remit those amounts without a further Income Tax or Capital Gains Tax charge on the remittance.
However, the TRF is not simply a reduced tax rate for bringing offshore money into the UK. The source of the funds, previous remittances, foreign tax already paid, mixed offshore accounts, trusts and the timing of any designation can materially affect whether using the facility is beneficial.
The Temporary Repatriation Facility is a transitional UK tax regime available for three tax years, from 6 April 2025 to 5 April 2028.
Broadly, eligible former remittance basis users can designate qualifying overseas capital representing certain historic foreign income and gains and pay a TRF charge of:
Once qualifying amounts have been validly designated and the TRF charge paid, those amounts can generally be remitted to the UK without a further UK Income Tax or Capital Gains Tax charge arising merely because of the remittance.
Importantly, designated funds do not necessarily have to be brought to the UK during the three-year TRF window. An eligible amount can be designated during the TRF period and remitted in a later tax year.
The UK abolished the remittance basis for foreign income and gains from 6 April 2025, replacing it with the new residence-based Foreign Income and Gains (FIG) regime.
However, abolishing the remittance basis did not remove the historic tax consequences of foreign income and gains accumulated under the old regime.
Pre-6 April 2025 foreign income and gains that were previously sheltered from UK tax under the remittance basis can still potentially become taxable when subsequently remitted to the UK.
The Temporary Repatriation Facility provides a transitional route for qualifying individuals to deal with certain historic offshore funds at a reduced tax rate.
The distinction is important: the TRF primarily concerns qualifying historic amounts connected with the former remittance basis. It is not a reduced tax regime for new foreign income and gains arising after 5 April 2025.
Broadly, an individual must:
Eligibility should be established before deciding whether, and how much, to designate.
Simply having offshore assets or previously being regarded as a “non-dom” does not automatically mean that an individual can use the TRF.
HMRC uses the term qualifying overseas capital for amounts that may be eligible for TRF designation.
For many taxpayers, this will include foreign income and gains arising before 6 April 2025 during years in which the remittance basis applied and which could otherwise create a UK tax charge when remitted.
Depending on the circumstances, qualifying amounts may include:
The TRF is not necessarily restricted to cash. Historic foreign income or gains may have been used to acquire shares, investments, property, artwork or other assets, and qualifying amounts represented by those assets may potentially be designated.
This is why establishing the history and composition of offshore wealth is often the first step in TRF planning.
One of the most important features of the Temporary Repatriation Facility is the ability to choose how much qualifying overseas capital to designate.
Consider an individual holding £1 million of qualifying historic foreign income and gains offshore.
If they realistically expect to use only £400,000 in the UK, it may be appropriate to consider designating that amount rather than automatically paying the TRF charge on the entire £1 million.
The appropriate strategy depends on factors including:
The objective should be to determine the appropriate amount to designate, rather than automatically applying the TRF to every potentially qualifying offshore amount.
A significant feature of the TRF is that designation and remittance are separate events.
An individual can designate qualifying overseas capital without immediately transferring the corresponding money to the UK.
For example, suppose a former remittance basis user holds £500,000 of qualifying historic foreign gains offshore.
If the full £500,000 is designated in 2025/26, the TRF charge at 12% would be:
£500,000 × 12% = £60,000
Provided the designation is valid and the TRF charge is paid, the designated amount can generally be brought to the UK later without a further Income Tax or Capital Gains Tax charge arising merely because of that remittance.
This can make early designation attractive where the individual expects to need the funds in the UK in future.
However, designation creates an actual tax liability. Paying tax now on offshore wealth that may never need to be brought to the UK could be inefficient. Future plans therefore need to form part of the decision.
Particular care is required where qualifying foreign income or gains are actually remitted during the TRF period.
Where an amount is remitted during 2025/26, 2026/27 or 2027/28 and has not previously been designated, the designation generally needs to be made for the same tax year as the remittance for TRF treatment to apply.
An individual should not assume that they can remit qualifying historic funds during one TRF year and simply make the relevant designation in a later tax year.
This makes transaction monitoring particularly important during the three-year TRF period.
The TRF lasts for three tax years, but the rate increases in the final year:
Tax Year of Designation | TRF Rate |
2025/26 | 12% |
2026/27 | 12% |
2027/28 | 15% |
This creates an important planning question for anyone already expecting to bring qualifying offshore funds into the UK.
If the funds are likely to be needed, making a designation while the 12% rate remains available may produce a lower TRF liability than waiting until 2027/28.
For example, a £1 million designation would result in:
That is a difference of £30,000.
However, the lower rate alone should not determine the decision. Cash flow, foreign tax, future residence and whether the money will actually be required in the UK should also be considered.
The headline 12% TRF rate can appear highly attractive, but it should not be viewed in isolation.
Foreign tax credit relief is not generally available against the TRF charge in the normal way. Where substantial foreign tax has already been suffered on historic income or gains, normal remittance taxation combined with available double tax relief could potentially result in a lower UK liability.
For example, consider two individuals each holding £100,000 of historic foreign gains.
If little or no overseas tax was paid on the first individual’s gains, a 12% TRF charge may be attractive.
If the second individual’s gains have already suffered significant foreign tax, the position may be different because foreign tax credit relief could affect the effective UK liability under normal remittance treatment.
The relevant comparison is therefore not simply:
12% TRF rate versus the normal UK tax rate.
It is:
TRF liability versus the actual net UK tax liability under the alternative treatment.
For substantial amounts, modelling both outcomes before making a designation can be important.
Many former remittance basis users have offshore accounts containing a combination of:
These are commonly referred to as mixed funds.
The TRF introduces important rules for these accounts. Where a mixed fund contains TRF capital, designated TRF amounts can generally receive priority when determining what has been remitted.
There are also special rules relating to the treatment of mixed funds during the three-year TRF period.
This can make the facility particularly useful for individuals who previously avoided bringing offshore money to the UK because of the complexity of the historic remittance ordering rules.
However, the TRF does not eliminate the need for proper records. Offshore account histories may still need to be reconstructed to determine what qualifies, what should be designated and what remains outside the TRF.
Where appropriate, an individual may consider using a dedicated TRF capital account to keep designated amounts separate from other offshore funds.
Separating designated amounts can make future transfers easier to track and reduce the risk of mixing TRF capital with other foreign income, gains or clean capital.
Specific conditions apply, however. Simply opening an offshore bank account and calling it a “TRF account” does not automatically achieve the required tax treatment.
The structure and movement of funds should be considered as part of the wider TRF planning exercise.
The TRF can also be relevant to beneficiaries and settlors connected with non-UK trusts.
Certain capital payments received during the TRF period may potentially qualify where they are matched to specified pre-6 April 2025 trust income or gains.
Trust cases can be considerably more complex than personally held offshore accounts. The analysis may need to establish:
Obtaining detailed historic information from trustees may therefore be necessary before making a TRF designation.
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The Temporary Repatriation Facility is not automatic.
The designation must be reported through the individual’s Self Assessment tax return, including the Residence and foreign income and gains pages (SA109).
For 2025/26, specific TRF reporting fields are available for matters including designated personal foreign income and gains, relevant trust amounts and designated amounts remitted during the year.
Supporting calculations and records should be retained, particularly where the taxpayer has:
For most taxpayers filing online, the normal deadline for the 2025/26 Self Assessment tax return is 31 January 2027.
A 2025/26 TRF designation can generally be made or amended within the normal amendment window, meaning the effective final deadline for a 2025/26 designation will normally be 31 January 2028.
However, taxpayers expecting to move offshore funds should consider the tax position before making transfers rather than relying on the later amendment deadline. x
An easily overlooked issue is where the money used to pay the TRF charge comes from.
If previously untaxed foreign income or gains are transferred to the UK simply to fund the TRF liability, that transfer could itself potentially constitute a taxable remittance unless the funds have been appropriately dealt with.
The funding of the TRF liability should therefore form part of the planning exercise.
Depending on the circumstances, clean capital, UK-taxed funds or appropriately designated amounts may produce different outcomes.
Assume Sarah is UK resident in 2025/26 and previously used the remittance basis.
She holds £600,000 of qualifying foreign income and gains arising before 6 April 2025 in an offshore account.
Sarah expects to need £300,000 in the UK to help fund a property purchase.
After reviewing the account history and confirming that the relevant amount qualifies, she designates £300,000 in relation to 2025/26.
The TRF charge would be:
£300,000 × 12% = £36,000
Once the designation is valid and the TRF charge has been paid, the designated £300,000 can generally be remitted without a further UK Income Tax or Capital Gains Tax charge arising merely because it is brought to the UK.
The remaining £300,000 has not been designated. Its tax treatment would therefore need to be considered separately if Sarah subsequently decides to bring it to the UK.
The example demonstrates why TRF planning should focus on how much should be designated, rather than automatically applying the facility to an individual’s entire offshore wealth.
The most important question is not simply whether the 12% TRF rate looks attractive. It is whether using the facility produces the best overall result for the individual.
For many former remittance basis users, the starting point should be a detailed offshore funds review.
That normally involves establishing:
Only after that analysis should the TRF liability be compared with the alternatives.
Timing also matters. Where an individual has already decided that qualifying funds will ultimately be required in the UK, 2025/26 and 2026/27 provide access to the 12% rate, compared with 15% in 2027/28.
But tax rate alone should never drive the decision.
Foreign tax credits, liquidity, future UK residence, mixed-fund composition, trust structures and the likelihood of actually needing the funds in the UK can all materially affect the appropriate strategy.
The abolition of the remittance basis did not eliminate the UK tax issues surrounding historic offshore income and gains.
For eligible former remittance basis users, the Temporary Repatriation Facility provides a potentially valuable three-year window to designate qualifying historic offshore amounts at a reduced UK tax rate.
The opportunity may be particularly relevant for individuals who expect to bring significant funds into the UK, hold complicated mixed offshore accounts or have historic income and gains tied up in investments or offshore structures.
The key dates are clear:
12% applies to qualifying designations in 2025/26 and 2026/27. The rate rises to 15% in 2027/28, and the TRF period ends on 5 April 2028.
The more important question is individual: which amounts should be designated, when should the designation be made and does the TRF actually produce the best overall tax outcome?
If you previously used the remittance basis and hold foreign income, gains, investments or other offshore assets accumulated before 6 April 2025, this is an important time to review your position.
Naail & Co can assess your eligibility for the Temporary Repatriation Facility, review historic offshore funds, analyse mixed-fund and foreign tax issues, calculate the potential TRF liability and advise on the appropriate treatment through your UK Self Assessment tax return.
Get in touch with Naail & Co to book your free initial consultation.
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The Temporary Repatriation Facility (TRF) is a three-year transitional UK tax regime for eligible former remittance basis users. It allows qualifying overseas capital representing certain pre-6 April 2025 foreign income and gains to be designated at a reduced tax rate. The TRF applies from 6 April 2025 to 5 April 2028, with designated amounts generally capable of being remitted to the UK without a further Income Tax or Capital Gains Tax charge on that remittance.
The Temporary Repatriation Facility is broadly available to individuals who are UK resident in the tax year of designation and previously used the remittance basis for at least one tax year before 6 April 2025. They must also have qualifying overseas capital that can validly be designated. Eligibility should be checked carefully because having offshore money or previously being regarded as a “non-dom” does not, by itself, mean that an individual qualifies for the TRF.
The Temporary Repatriation Facility tax rate is 12% for qualifying amounts designated in 2025/26 and 2026/27, increasing to 15% in 2027/28. For example, designating £500,000 of qualifying overseas capital at 12% would produce a £60,000 TRF charge. However, the headline rate should not be considered in isolation, particularly where foreign tax has previously been paid or only part of the offshore funds is likely to be needed in the UK.
A Temporary Repatriation Facility designation can be made for 2025/26, 2026/27 or 2027/28, but timing can materially affect the tax cost. The rate is 12% for the first two years and rises to 15% for the final year. Where qualifying funds have already been remitted during a TRF year, the timing rules require particular care. Individuals expecting to use offshore funds in the UK should therefore consider their designation strategy before making significant transfers.
Yes. The Temporary Repatriation Facility allows qualifying overseas capital to be designated during the TRF period without requiring the corresponding funds to be immediately remitted to the UK. Once an amount has been validly designated and the TRF charge paid, it can generally be remitted in a later tax year without a further Income Tax or Capital Gains Tax charge arising merely because of that remittance. This can provide useful flexibility for longer-term UK financial planning.
Yes. The Temporary Repatriation Facility is not automatic and a designation must be made through Self Assessment. HMRC’s 2025/26 Residence and foreign income and gains pages (SA109) contain specific TRF reporting fields. Accurate records should support the amount designated, its underlying source and any amounts remitted. Mixed funds, offshore trusts and historic transfers can make the calculation significantly more complex, so the supporting analysis should normally be completed before the tax return is filed.
The Temporary Repatriation Facility can be particularly valuable where an offshore account contains a mixture of clean capital, historic foreign income and foreign gains. Special TRF ordering rules can allow designated TRF capital to be treated as remitted before certain other components of a mixed fund. This may simplify access to offshore wealth, but taxpayers should not assume that historic tracing is unnecessary. Establishing the composition of the account remains important when determining what qualifies for designation.
Yes, the Temporary Repatriation Facility can apply in certain circumstances to qualifying amounts connected with non-UK trusts. Certain capital payments received during the TRF period may qualify where they are matched to specified pre-6 April 2025 trust income or gains. Trust cases require careful analysis of historic income and gains pools, previous distributions and matching rules. Beneficiaries and settlors should therefore obtain the relevant trustee records before assuming that a trust distribution qualifies for the reduced TRF rate.
The main Temporary Repatriation Facility risks include designating non-qualifying amounts, failing to analyse mixed funds, overlooking foreign tax already paid, missing the correct designation year and paying the TRF charge from funds that themselves create a taxable remittance. Another common mistake is designating all offshore funds simply because the 12% rate appears attractive. A TRF election creates a real tax liability, so the expected UK use of the funds should be assessed before deciding how much to designate.
The Temporary Repatriation Facility should be compared with the tax that would arise under normal UK remittance rules before making a designation. The analysis should consider the original foreign income and gains, available foreign tax credit relief, mixed-fund composition, future UK remittances, offshore structures and whether the money is actually likely to be needed in the UK. For substantial offshore funds, modelling different designation amounts and timing scenarios can identify whether the 12% or 15% TRF charge produces a genuine tax saving.
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