PWM International

Previous remittance
basis regime

If you held offshore income and gains under the old remittance basis UK tax regime, it’s important to understand what the new residence-based regime, introduced by the UK government on 6 April 2025, means for your financial affairs.

Our experienced International team are here to help – bringing specialist knowledge and connections to bear as we support you to optimise your personal financial planning. 

An introduction to the remittance basis guide An introduction to the FIG regime

Understanding the new UK residence-based tax regime

From 6 April 2025, the UK government replaced the previous tax rules for non-UK domiciled individuals with a residence-based regime. The new regime moves away from the concept of domicile to the more direct determination of residence to define your individual UK tax status.  

If you are a new UK resident, the new regime means you will not pay tax on foreign income and gains for four years. Following that period, you’ll pay the same tax on your foreign income and gains as any other UK resident, regardless of your domicile status. As a result, there are significant tax benefits to organising your finances and assets ahead of your move. Part of our pre-arrival work with you will include mapping out how you will use your assets and cashflows once you’re a UK resident to ensure your affairs are optimised for this regime. 

The new rules also significantly impact any trusts you may hold as well as your inheritance planning, so these areas will also be part of our detailed review and pre-arrival planning.  

Understanding where the old remittance basis still impacts you

Even though there are now new rules in place, if you hold offshore income and gains under the old rules, you still need to be mindful of considerations such as situs and remittance. For a reminder of the now-defunct remittance basis rules, please see our remittance basis guide. 

Untaxed offshore income and gains, and accounts with “mixed funds” where offshore income and gains remain, would still attract UK tax if they were remitted to the UK. As a result, it’s just as important for you to maintain practices such as offshore custody, non-UK situs investing and income segregation as it was before.   

Understanding the temporary repatriation facility (TRF)

If you need or want to consider bringing such offshore income and gains into the UK, you may want to consider using the temporary repatriation facility (TRF). This is a unique and time-limited opportunity for remittance basis users who accumulated offshore income and gains before 6 April 2025 to have a significantly lower tax rate applied to these funds.  

To benefit from the TRF, you must designate funds and pay the relevant TRF charge as part of your self-assessment tax return. Assets designated under the TRF don’t need to be remitted to the UK immediately, but you’ll only be able to designate funds up to the tax year 2027-2028. The relevant tax rates under the TRF are: 

  • 12% tax payable in the tax year 2025–26 
  • 12% Tax payable in the tax year 2026–27 
  • 15% tax payable in the tax year 2027–28 

As provisions in this area are complex, and paying the TRF won’t suit or be tax efficient for everyone, we highly recommend expert advice.   

How we can help

Our specialist International team can help you navigate these complex rules and advise you on building and maintaining a tax-efficient financial plan. We’ve been helping clients do this for over 20 years, so we have the knowledge, experience and professional connections to offer you comprehensive, expert support.  

 

For further information

To find out more about how we can help you with no obligation, please contact  Nathan Prior, Partner and Head of PWM International.

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