The clock is ticking: Have you used the temporary repatriation facility (TRF)?

Understanding the post April 2025 changes to non-domicile taxation

From 6 April 2025, the longstanding Remittance Basis came to an end¹. This rule let non-dom individuals avoid UK tax on foreign income and gains (FIG) that were not brought into the UK. It’s now been replaced with a new system². This offers a shorter window of tax relief for people who’ve recently moved to the UK, plus a set of transitional options for former remittance basis users.

The newer transitional options can still offer valuable planning opportunities if used in the right way.

We’re nearing the end of the first year of a three-year window for the transitional reliefs³. So, it’s vital that previous remittance basis users review their position and confirm whether the relief is worthwhile. If it is, they’ll need to act soon.

A quick recap of the temporary repatriation facility (TRF)

If you have untaxed FIG from the remittance basis years and wish to bring these funds to the UK, the TRF could offer a valuable yet time-limited opportunity.

The TRF lets eligible individuals “designate” FIG and pay a lower tax charge. You don’t need to bring the funds to the UK straight away, but the window is limited, as is the available tax rate.

TRF tax rates⁴

• 2025–26: 12%
• 2026–27: 12%
• 2027–28: 15%

You should make designations via a self-assessment tax return, and the TRF charge is payable in the year of designation. If the designated funds stay offshore, it’s important that they stay separate so that they can be identified separately from other assets.

The TRF and US citizens

The TRF lets UK remittance basis users pay a lower tax on historic FIG at a 12–15% tax rate. However, interaction between US and UK tax rules may mean this is less beneficial for US citizens.

For US citizens who’ve already paid US tax on funds:

• There may be mismatches and the risk of double taxation, as the UK will not give credit for the US tax already paid.
• The IRS may not give credit for the TRF charge, as it’s a “voluntary election” rather than a compulsory tax.

Review your personal position

As with any financial planning, there’s no one size fits all answer. You’ll need to check what’s best for you. Untaxed income or gains from remittance basis years can remain offshore from the UK and remain untaxed – unless and until brought into the UK.

Cashflow modelling can help you determine if and when you might need these funds in the UK. This can show if it’s better to pay the TRF charge now vs paying tax on a remittance in future.

We’re here to help

These changes create both challenges and opportunities for internationally mobile clients. If you’d like to understand how the new regime and transitional facilities could affect your financial planning, please contact Nathan Prior or any of PWM’s specialist international advisers.

Nathan Prior
Partner, Head of PWM International
nprior@partnerswealthmanagement.co.uk
020 7444 4053

Tax treatment depends on individual circumstances and may change in future.

Sources

¹ RDRM32030 – Remittance Basis: Accessing the remittance basis: Claiming the remittance basis up to 5 April 2025: Claims – Time Limits – HMRC internal manual – GOV.UK

² RDRM71000 – Temporary repatriation facility: Introduction – HMRC internal manual – GOV.UK

³ RDRM71000 – Temporary repatriation facility: Introduction – HMRC internal manual – GOV.UK

⁴ RDRM73400 – Temporary repatriation facility: Designating qualifying overseas capital: TRF charge – HMRC internal manual – GOV.UK