Temporary Repatriation Facility (TRF) – Key Features

From 6 April 2025 to 5 April 2028, UK resident individuals who have previously claimed the remittance basis and hold unremitted foreign income and gains arising before 6 April 2025 may designate all or part of those amounts under the Temporary Repatriation Facility (TRF)

From 6 April 2025 to 5 April 2028, UK resident individuals who have previously claimed the remittance basis and hold unremitted foreign income and gains arising before 6 April 2025 may designate all or part of those amounts under the Temporary Repatriation Facility (TRF), enabling repatriation to the UK at a reduced tax rate.

Tax rate

• A flat rate of 12% applies to designations made in the 2025/26 and 2026/27 tax years.
• A higher rate of 15% applies to designations made in 2027/28.

Designation of qualifying foreign income and gains

To use the TRF, individuals must designate specific amounts of qualifying foreign income and gains – that is foreign income and gains which:

• Arose after UK residence but before the 2025/26 tax year; and
• Were subject to the remittance basis.

Designation can be made where the funds are:

• Held offshore and intended for remittance to the UK; or
• Already in the UK but untaxed due to a specific exemption (i.e. temporary import) or Business Investment Relief (BIR).

In addition to qualifying foreign income and gains, the following may also be designated under the TRF:

• Funds of uncertain origin, where the source cannot be clearly identified; or
• Capital payments from non-UK trusts during the three-year TRF period, provided they are matched to relevant foreign income and gains that arose within the trust before the 2025/26 tax year.

Time limit for making a designation

A designation under the TRF must be made by the deadline for amending the relevant self-assessment tax return, i.e. by the first anniversary of 31 January following the end of the tax year.

For example, for the 2025/26 tax year, the return is due by 31 January 2027, and the amendment window remains open until 31 January 2028. Accordingly, the latest date by which a designation may be made for 2025/26 is 31 January 2028.

Once this amendment deadline has passed, designations cannot be amended or withdrawn, and the election becomes irrevocable.

Foreign tax credit

The TRF is a concessionary flat-rate tax regime. Under UK tax law, a Foreign Tax Credit (FTC) is only available to offset UK tax liability calculated under the ordinary tax regime and does not apply to amounts taxed under concessionary schemes such as the TRF.

As a result, no FTC can be claimed for foreign tax paid on foreign income and gains remitted under the TRF.

Complicated situations

Scenario 1:

An offshore account contains only foreign income and gains that arose after the individual became UK resident but before the 2025/26 tax year, during which the remittance basis was claimed. The individual intends to remit part of the funds under the TRF and the remainder under the ordinary tax regime, claiming a FTC where applicable.

Key points:

• The TRF and the ordinary tax regime can operate concurrently.
• To maximise tax efficiency, funds intended for TRF treatment should be clearly segregated, i.e. transferred into a separate account before remittance.
• Non-designated funds can still be remitted under the ordinary tax rules, allowing a FTC claim where applicable.

Scenario 2:

An offshore account contains a mixture of:

• Clean capital (funds accumulated before UK residence); and
• Foreign income and gains that arose after UK residence but before the 2025/26 tax year, where the remittance basis was applied.

Key points:

• The account is treated as a mixed fund, so the mixed fund ordering rules must be applied to identify the taxable element.
• The taxable element must be determined before any TRF designation is made.
• Once identified, the amounts intended for TRF treatment should be segregated into a separate account.

It is strongly advisable to seek professional tax advice for the scenarios outlined above or for any other complex situations not covered here.

Related content

• PERSONAL TAX
• UK EXPATS
• PRIVATE CLIENT ADVISORY
• ARTICLES