The remittance basis (‘non-dom’ regime, as it is known by many) was abolished for tax years beginning after 5 April 2026, but those who claimed it in earlier years can still take advantage of it. Foreign income and gains (FIG) from those earlier years will be subject to UK tax only when remitted (ie brought into, or used in) the UK. The temporary repatriation facility (TRF) was introduced as a transitional relief for those losing access to the remittance basis from April 2025 who still hold FIG from earlier years.

The TRF is designed to allow (and indeed encourage) those with historic FIG to bring those amounts to the UK. It represents a unique opportunity to benefit from a significantly reduced rate (particularly for income). However, a key point to remember about the TRF is that the ‘T’ stands for ’temporary’. You could think of it as a sort of ‘Cheshire Cat tax relief’, fading to just a grin in 2027 before disappearing. Sadly, there is no ‘C’ in the acronym but if there were it could stand for ‘confusing’ and ‘complex’ meaning those who qualify may have less time than they think to get the advice they need.

How the TRF works: rates, eligibility and deadlines

Beginning with the basics, the TRF allows ‘non-doms’ to pay a fixed rate of tax on qualifying FIG tax. Until 5 April 2027, this rate is 12%, rising to 15% for the following tax year, before ceasing to be available altogether after 5 April 2028.

Many may feel that with their full worldwide income and gains now subject to UK tax, there is no need to access these offshore monies. However, those who expect to need additional capital or wish to access funds held in non-UK resident trusts, even in the medium term, may wish to consider taking advantage of this one-time offer.

The benefits of using the TRF should also be considered by those with assets overseas, such as artwork. Bringing such assets to the UK would result in a remittance of the FIG used in their purchase. Equally, those now taxable on the remittance basis who wish to wind up an offshore trust while limiting the overall tax charge, may also benefit from considering the use of the TRF.

At first glance the TRF appears straightforward: FIG which would be taxable on the remittance basis can be designated as ’qualifying overseas capital’ (QOC). Amounts are then declared on a tax return and the TRF paid. Those amounts can then be brought to the UK without any additional tax being due. However, once you delve into the detail, you find that the Cheshire Cat is not the only echo of Alice in Wonderland with these rules – there are labyrinthine twists and turns and rabbit holes to fall down.

Complication number one – identify your QOC

For those who have kept carefully separated income and capital accounts, identifying foreign income to nominate as QOC may be simple. Sadly, real life is rarely so accommodating, and many will have foreign income and gains sitting in mixed accounts. This is still relatively easy to navigate, even if you cannot evidence the source of everything in that mixed account. HMRC allows you to over-designate for cash and assets held in your own name. This means if you are unsure (or can’t evidence) whether something is income, capital gains or clean capital, you can still nominate it to be on the safe side. The TRF can then be paid on the whole amount, allowing the full contents of the mixed fund to be brought to the UK.

For those who either do not want to bring the full amount to the UK, or who wish to only nominate actual FIG, the process may be more complex. This is because it will be necessary to analyse what has entered and left the account to date (applying the special ‘mixed fund’ rules for this purpose) and therefore determine what FIG is left to nominate. Once this is done, however, the amount on which the TRF has been paid becomes the ’top slice’ of the fund and can either be brought to the UK or moved into a special ‘TRF capital‘ account.

Complication number two – trusts QOC

Many UK-resident, non-UK domiciled individuals are likely to have established non-UK trusts. This might be for a variety of reasons of which tax is only one. However, many settled such trusts specifically to avail themselves of the ‘protected foreign-source income’ rules, introduced in 2017 as part of the last changes to non-dom taxation. These rules allowed income on which the settlor might otherwise be personally taxable (under either the transfer of assets abroad rules or the settlements provisions) to build up tax free within the trust. That income would only become subject to tax when a payment was made to a beneficiary.

The good news for these individuals is that this income (as well as any trust gains) is now eligible to be designated as QOC where it is matched to benefits. This allows the TRF to be paid and amounts brought into the UK at a reduced rate.

The twist (and you knew there would be one) is that those amounts need to be identified and that can be much more complicated at trust level. This is because the mixed fund rules don’t work very well (or arguably even apply) within trusts – they were designed to apply to individuals not trustees. In addition, there is no facility to ‘over-designate’ within a trust this is limited to funds and assets held personally.

In most cases these difficulties can be navigated, but it is far from straightforward. This brings us to the next complication…

Complication number three – double designation

This is where it gets very ‘Alice in Wonderland’ because one amount of money might really be two different amounts for the purpose of the TRF. Do you see? No? Don’t worry, you aren’t the only one. Essentially, when funds are paid out of a trust to a beneficiary, they are generally matched to either income or gains. So far so good – every international tax specialist would agree.

The complication is that it is rarely the actual income and gains that are paid out. For many settlors, the trust may have been established using personal FIG on which they would be personally taxable if remitted.

Where these amounts are paid out of the trust to a beneficiary in the UK, the original personal FIG may need to be nominated in addition to any amount of trust income or gains that are matched – essentially meaning that one amount of, say, £100 might represent both £100 of personal FIG and £100 of trust income or gains. Confused? You’ve every right to be.

The upshot is that in these circumstances, the £100 would need to be designated twice and an effective rate of 24% paid on the QOC to prevent a further tax charge when amounts are brought to the UK. Again, the risk can be managed, but it will need careful analysis.

Should you use the TRF?

As the Cheshire Cat would say, that depends very much on where you want to go.

Yes, the TRF rules can be confusing, but it remains a tempting opportunity. With the right advice, most people will be able to navigate the complex rules and take advantage of the 12% TRF rate. This allows them to bring funds (or assets) to the UK, or to pay funds out of trust, with a reduced effective tax rate.

However, those wishing to avail themselves of this opportunity can afford to wait. The complexity of the rules means that establishing the amounts which might qualify and extracting them without falling into a double designation rabbit hole, may take time.

And the White Rabbit’s clock is ticking…you don’t want to be late.

If you believe the TRF may be relevant to you, taking advice at an early stage will be key to managing the complexities and making the most of the opportunity. Get in touch with Caroline Le Jeune or your usual RSM contact to discuss your circumstances and receive tailored advice on navigating the TRF rules and maximising the available relief.

Latest related insights