The October 2024 Budget signalled a seismic shift in the UK personal tax landscape, dismantling some of the long-standing benefits previously enjoyed by non-domiciled individuals. With it, the government has introduced a short-lived but potentially powerful concession – the Temporary Repatriation Facility (TRF).
As explained below, the TRF is a one-time opportunity which can be incredibly lucrative for those who are eligible. It should be assessed and taken advantage of now, while available, before this opportunity is lost forever.
This facility offers a time-limited window, from 6 April 2025 to 5 April 2028, during which eligible individuals may elect to bring previously untaxed foreign income and gains into the UK at significantly reduced tax rates. This includes not only personal offshore income and gains but also distributions and benefits received from non-UK trusts.
The preferential tax rates available under the TRF are as follows:
- 12% for the 2025/26 tax year
- 12% for the 2026/27 tax year
- 15% for the 2027/28 tax year
Crucially, once income or gains have been validly designated under the TRF, the funds may be remitted to the UK either immediately or in later years without triggering any further UK tax charges. This introduces a welcome degree of flexibility for those seeking to repatriate capital efficiently as part of a broader wealth planning strategy.
Eligibility Criteria – Who Can Use the TRF?
To qualify for the TRF, individuals must satisfy the following conditions:
- Be UK resident in the tax year the election is made
- Have claimed the remittance basis in at least one tax year before 2025/26
- Ensure the relevant foreign income or gains remained outside the UK and unremitted until at least 6 April 2025
Making the Election – Process and Deadlines
Accessing the TRF requires:
- Making a formal election via the Self-Assessment tax return for the relevant tax year
- Quantifying and designating the qualifying foreign income or gains
- Paying the reduced 12% or 15% tax, after which funds can be brought to the UK at any future time without further UK taxation
The election deadline follows the normal amendment period, i.e. 31 January two years after the end of the relevant tax year (e.g. by 31 January 2027 for 2025/26).
Relevance for offshore trusts
For settlors and beneficiaries of non-UK trusts, the TRF represents an essential planning opportunity. Following the 2024 reforms, many of the historical protections around offshore trusts, particularly those linked to inheritance tax, income tax, and capital gains tax – have either been withdrawn or heavily curtailed for long-term UK residents.
This means trustees and settlors may now wish to consider accelerating distributions of historical income or gains, especially where those amounts accrued before 6 April 2025. Provided the underlying income or gains were generated before this date, even if the actual distribution occurs later, the TRF can be applied, potentially reducing exposure from up to 45% income tax or 38.4% CGT to just 12% or 15% flat tax (depending on the year of distribution or benefit provision). You can find more information in our dedicated blog post on trusts.
Final remarks
The TRF offers time-limited opportunity for internationally mobile individuals and offshore trustees to bring historical previously untaxed foreign income and gains to the UK on uniquely favourable terms.
Navigating the TRF requires a careful and coordinated approach, including tracing historical foreign income and gains, strategically timing designations and remittances, and ensuring alignment with broader family estate planning objectives.
If you or your clients are potentially eligible, or if your work involves advising on offshore trusts or cross-border tax matters, this is an important opportunity to consider how best to utilise the TRF.
Please get in touch with our private client tax team to arrange an initial discussion and see how we can support you throughout the process before the TRF opportunity is lost.
Please get in touch with our private client tax team to arrange an initial discussion and see how we can support you throughout the process before the TRF opportunity is lost.
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