The Temporary Repatriation Facility (TRF): Using the Window to Clean Up Foreign Income

For the thousands of individuals who used the remittance basis in the years before April 2025, the abolition of that regime created an uncomfortable problem: substantial amounts of foreign income and gains had been legitimately accumulated offshore — untaxed — on the basis that they would only become subject to UK tax if brought into the UK. With the remittance basis gone, what happens to those funds?

The government introduced the Temporary Repatriation Facility (TRF) specifically to address this. It provides a time-limited window — tax years 2025/26, 2026/27, and 2027/28 — during which former remittance basis users can designate previously unremitted foreign income and gains and bring them into the UK at a substantially reduced flat tax rate, without further UK income tax or CGT liability on those amounts. After 2027/28, the TRF closes and the standard transitional rules apply.

Who Is the TRF For?

The TRF is available to individuals who:

• Were UK-resident and used the remittance basis at any point before 6 April 2025
• Have "pre-April 2025 foreign income and gains" — that is, foreign income or gains that arose in a remittance basis year and were not remitted to the UK before 6 April 2025

There is no minimum or maximum amount limit. The TRF is open to any qualifying individual regardless of how much foreign income or gains they have accumulated.

Crucially, the TRF is not available to individuals who have never used the remittance basis. If you were taxed on the arising basis throughout your UK residence, you have no unremitted foreign income or gains in the relevant sense.

What Does the TRF Offer?

The TRF allows qualifying individuals to designate previously unremitted foreign income and gains and pay a flat rate of UK tax on the designated amount:

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

Once the designated amount has been taxed at the TRF rate, it can be brought into the UK (or used within the UK) freely, without any further income tax or CGT charge.

This is a significant concession. Designated amounts are taxed at 12-15% rather than the income tax rates (up to 45%) or CGT rates (up to 24% for gains, or up to 39.35% for dividend income) that would otherwise have applied if the amounts had been remitted before April 2025 or if they were deemed to arise post-April 2025 under general rules.

What Can Be Designated?

The designated pool consists of:

• Unremitted foreign income from any remittance basis tax year (income from employment performed abroad, overseas investment income, foreign rental income, etc.)
• Unremitted foreign capital gains from any remittance basis tax year

For these purposes, "unremitted" means the income or gains have not previously been brought into the UK in a way that gave rise to a UK tax charge. Clean capital — funds that were already in the UK or had been remitted and taxed previously — is not part of the TRF pool.

The individual does not need to actually bring the funds into the UK to use the TRF; they can designate the amount, pay the TRF tax, and leave the funds offshore. The effect is that those funds are "cleaned" — they can be freely remitted in the future without further charge.

Making a TRF Designation

Designations are made on the UK self-assessment return for the relevant tax year. The individual specifies the amount they wish to designate and pays the TRF tax (12% or 15% depending on the year) on the designated amount. There is no requirement to identify the specific source of the designated funds in the same granular way as was previously required under the remittance basis ordering rules; the designation is of a quantum of previously unremitted foreign income and gains.

Key deadline: Designations for 2025/26 can be made up to the self-assessment filing deadline for that year (31 January 2027). Designations for 2026/27 must be made by 31 January 2028, and for 2027/28 by 31 January 2029.

After the TRF window closes (after 2027/28), any remaining unremitted foreign income and gains from pre-April 2025 remittance basis years become subject to the transitional rules. Under those rules, previously unremitted foreign income and gains remain subject to UK income tax or CGT at full rates if remitted to the UK after the TRF window closes — but the "mixed fund" rules continue to apply and the complexity of analysing the composition of offshore funds remains.

Interaction with Mixed Funds

One of the most complex aspects of the old remittance basis was the "mixed fund" ordering rules. Where offshore bank accounts or portfolios contain a mixture of foreign income, foreign gains, and clean capital (capital that was never subject to remittance basis charge), the rules prescribe a specific order in which amounts are treated as remitted. The ordering rules meant that even an innocent transfer from a mixed offshore account to a UK account could trigger a remittance tax charge on the income element first.

The TRF simplifies this significantly. Once funds have been designated and the TRF tax paid, they are treated as clean capital and can be freely mixed and remitted without concern about the ordering rules. This is one of the most compelling practical reasons to use the TRF — it eliminates the ongoing compliance burden of managing mixed funds.

How Much Should You Designate?

The optimal designation amount depends on:

Size of the accumulated pool: If you have significant unremitted foreign income and gains, designating the full amount at 12% (in 2025/26 or 2026/27) may be highly cost-effective compared with leaving funds offshore indefinitely or facing full-rate tax on eventual remittance.

Your plans for the funds: If you intend to bring large amounts into the UK — for property purchase, business investment, or spending — using the TRF before doing so ensures the remittance is clean. If you intend to leave funds offshore permanently, the TRF cost must be weighed against the benefit of cleaning the funds.

Other UK tax considerations: TRF designations are subject to income tax assessment in the year of designation, not CGT. The rate (12-15%) is flat and does not interact with income tax rates or personal allowances.

Ability to evidence the pool: HMRC may require individuals to demonstrate that a designated amount falls within the pool of unremitted pre-April 2025 foreign income and gains. Where records are incomplete, there is a risk of dispute.

Record-Keeping

Good record-keeping is essential for using the TRF effectively. You should be able to demonstrate:

• That you used the remittance basis in specific tax years
• The amounts of foreign income and gains arising in those years
• That those amounts were not previously remitted (or, if remitted, were remitted in a way that attracted a tax charge)
• The offshore accounts or structures in which the funds are held

HMRC's CRS data — received from overseas financial institutions — increasingly allows it to cross-reference offshore balances against UK tax returns. Inconsistencies will be challenged.

What Happens After the TRF Window?

After 5 April 2028:

• The TRF is no longer available
• Any remaining unremitted pre-April 2025 foreign income and gains remain in the "historic" mixed fund pool
• Remittances from that pool to the UK will continue to be taxed under the (now frozen) remittance basis ordering rules
• These amounts will not simply "disappear" from HMRC's view — they remain a latent UK tax liability for as long as the individual continues to remit from the pool

Individuals with large pools of unremitted foreign income and gains who choose not to use the TRF are effectively deferring a tax liability rather than eliminating it. The TRF offers a defined cost; indefinite deferral creates uncertainty and ongoing compliance complexity.

Planning in Practice

The TRF presents a genuine planning window. Effective use requires:

1. An accurate quantification of the historic unremitted pool (working with tax advisers to reconstruct offshore fund histories)
2. A decision on how much to designate in each TRF year (bearing in mind the rate increases to 15% in 2027/28)
3. Coordination with wider financial planning — including any planned UK property purchases, business investments, or lifetime gifting that require clean UK funds
4. Filing accurate self-assessment returns with TRF elections by the relevant deadlines

How Global Investments Can Help

Global Investments works with clients who have complex overseas fund histories and need a structured approach to the TRF. We help quantify the historic pool, model the optimal designation strategy across the three TRF years, coordinate the interaction with wider UK tax and IHT planning, and ensure self-assessment returns are filed correctly. The TRF window closes after 2027/28 and the analysis is time-sensitive; we encourage early engagement. This guide reflects the position as of 2026; tax rules are subject to change. Professional advice specific to your circumstances is essential.