If you claimed the remittance basis before 2025-26 and still have substantial foreign income or gains sitting offshore, you have a short, valuable window to settle that legacy UK exposure cheaply. The Temporary Repatriation Facility lets you crystallise those pre-2025-26 unremitted balances at a fixed rate of 12% in 2025-26 and 2026-27, rising to 15% in 2027-28, then bring the money onshore as clean capital. The window opens with the 2025-26 tax year and closes on 5 April 2028. Miss it, and any legacy balances you bring onshore afterwards are taxed under the standard remittance-basis rules at full marginal rates of 40% to 45%. For most people in this position, the TRF is the single biggest planning lever in the Finance Act 2025 package.

The substantive rules live in Finance Act 2025 Schedule 10; section 41 is just the introducing provision.

If you are a recent arrival rather than a legacy remittance-basis user, the TRF is not your regime: the parallel route is FIG, and the detail sits in our guides to FIG eligibility and FIG election mechanics.

The statutory architecture: Section 41 + Schedule 10

Finance Act 2025 section 41 reads in full: "Schedule 10 makes provision for a 'temporary repatriation facility' for individuals who have been subject to the remittance basis." That one line is all section 41 does; the substance is in Schedule 10, which has three parts. Part 1 sets the TRF charge and the qualifying-capital definitions; Part 2 provides the income-tax exemption on designated amounts; Part 3 provides the CGT exemption. Together they crystallise the underlying remittance-basis status at the TRF rate and exempt the designated amount from further UK tax.

The mechanism is technically a "designation election", not a literal remittance. You make the election in your self-assessment return for the relevant tax year (2025-26, 2026-27, or 2027-28), and the underlying capital does not have to physically move from offshore to the UK at that point. The clean-capital effect attaches to the designated amount, and you can move the actual capital onshore at any later date with no UK tax on the remittance. Decoupling designation from physical movement is the useful bit: you lock in the favourable TRF rate now without being forced to repatriate, so you can keep an offshore portfolio at its non-UK booking centre for operational or family reasons while still settling the legacy UK exposure at the reduced rate.

The three-rate schedule at paragraph 1(8)

Schedule 10 paragraph 1(8) provides the rate verbatim:

"The amount of the TRF charge on qualifying overseas capital designated by an individual is: (a) in the case of amounts of qualifying overseas capital designated in a return for the tax year 2025-26 or 2026-27, the amount equal to 12% of the amount of that capital, and (b) in the case of amounts of qualifying overseas capital designated in a return for the tax year 2027-28, the amount equal to 15% of the amount of that capital."

The 12% rate in 2025-26 and 2026-27 sits well below the marginal income-tax rate (40% to 45%) you would otherwise pay on remittance of foreign income, and below the CGT rate (18% to 24%) on remittance of foreign gains. The 15% rate in 2027-28 still beats those rates comfortably, but it is the sunset signal: leave designation to the third year and you pay a 25% premium on the rate itself (15% against 12%). After 5 April 2028 the window closes entirely.

The eligibility gateway: paragraph 1(4)-(6)

Schedule 10 paragraph 1 subsections (4) to (6) set the eligibility conditions. You must: (i) be UK-resident in the year of designation; (ii) make the designation in your self-assessment return for that year; (iii) have been subject to the remittance basis (ITA 2007 section 809B) for at least one pre-2025-26 tax year, with unremitted balances that qualify as overseas capital under paragraph 2.

The residence requirement is binding. If you emigrate partway through the TRF window, you can no longer designate in any year after you cease UK residence. The route closes at the point of departure, and your unremitted offshore balances stay subject to the standard remittance-basis rules on any later remittance.

The remittance-basis-history requirement is what excludes new arrivals using FIG. Someone arriving in 2025-26 has no pre-2025-26 UK-residence record (they satisfy the s.845B(1)(c) 10-year prior-non-residence test), so they have no remittance-basis claim history and no unremitted pre-2025-26 balances to designate. The FIG and TRF populations do not overlap; you are in one camp or the other.

The three categories of qualifying overseas capital (paragraph 2)

Schedule 10 paragraph 2 defines three distinct scenarios. Each runs independently:

  1. Scenario A, paragraph 2(2): the amount arose in tax year 2024-25 or earlier as foreign income or gains AND has not been remitted to the UK by the date of designation. This is the canonical unremitted-balance category: pre-2025-26 foreign income or gains accumulated offshore under the remittance basis and still offshore at the time of designation.
  2. Scenario B, paragraph 2(5): the amount arose in tax year 2024-25 or earlier as foreign income or gains AND is actually remitted to the UK during tax years 2025-26, 2026-27, or 2027-28. This is the "in-window remittance" category: you bring the pre-2025-26 balance onshore during the TRF window and designate it at that point, locking in the favourable rate rather than paying full marginal rate on the remittance.
  3. Scenario C, paragraph 2(8): the amount does not fall within Scenario A or B, you held it immediately before 6 April 2025, AND it was situated outside the UK throughout (from acquisition to the point of designation). This is the residual catch-all: it picks up offshore capital that doesn't have a clear remittance-basis income or gain origin but is structurally similar to the unremitted-balance positions the TRF is designed to clean up.

Three categories gives you room to manoeuvre. If your offshore portfolio is mixed (some clear remittance-basis income, some accumulated capital gains, some clean-capital-equivalent holdings), you can designate amounts under each category in the same or different tax years. The total you designate across all categories and all years is what gets clean-capital treatment, and the TRF charge is worked out on the designated amount at the rate for the year of designation.

The designation deadline at paragraph 8(1)

Schedule 10 paragraph 8(1) sets the deadline:

"A designation election for a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year."

So your deadlines are: 2025-26 designations by 31 January 2028; 2026-27 designations by 31 January 2029; 2027-28 designations by 31 January 2030. This lines up with the FIG claim deadline at s.845A(5) (the same 12-month-from-31-January structure). You cannot designate late. The standard TMA 1970 amendment routes (s.9ZA standard amendment; s.43 4-year discovery amendment) do not extend the TRF window itself, though they may let you file a missing return where you intended to designate but never filed.

Partial designation and per-year flexibility

Designation is per-amount, not per-source. Say you have a £500k offshore unremitted balance. Designate £200k in 2025-26 and the remaining £300k in 2027-28, and the £200k is taxed at 12% and the £300k at 15%, a total TRF charge of £24k plus £45k = £69k. Designate all £500k in 2025-26 at 12% instead and the total is £60k, so front-loading saves you £9k. The trade-off is cash-flow timing: paying £60k of TRF charge in January 2028 (the payment date for 2025-26 designations) against spreading it across January 2028 and January 2030.

Designation is also per-year. You can spread it across all three years of the window or front-load into year 1, and you decide afresh on each annual return. Run the present-value calculation before you commit: 12% in years 1 and 2 is structurally cheaper than 15% in year 3, but the cash-flow cost of front-loading can be material if your balance is large.

The clean-capital effect post-designation

Once you designate a slice of qualifying overseas capital and pay the TRF charge, it becomes "clean capital" for UK tax purposes. Schedule 10 Parts 2 and 3 provide the technical exemptions. Part 2 disapplies the income-tax charge that would otherwise apply under ITTOIA 2005 section 832 (the foreign-income remittance trigger) when you remit the designated amount. Part 3 disapplies the CGT charge that would otherwise apply under TCGA 1992 Schedule 1 on the remittance.

The clean-capital status is permanent. Designate £500k in 2025-26 and you can hold the capital offshore for as long as you like, then bring it onshore in 2027-28, 2030-31, or any later year UK-tax-free. The status also survives a change in your residence: if you designate while UK-resident, later emigrate, then return, the clean-capital treatment still applies to any later remittance.

The distinction from FIG: not for new arrivals

FIG (ITTOIA 2005 ss.845A-845J) is the parallel regime for new arrivals. It gives a four-year exemption on foreign income and gains arising 2025-26 onwards if you have 10+ consecutive prior non-UK tax years. TRF is for legacy non-doms with pre-2025-26 unremitted offshore balances. The two are alternatives, not stacked options; you are in one camp or the other.

If you arrived in 2025-26 and qualify for FIG you do not need TRF: your post-2025-26 foreign income is FIG-exempt during the four-year window, and you have no pre-2025-26 UK tax history to clean up. If you used the remittance basis pre-2025-26 you do not qualify for FIG (you fail the s.845B(1)(c) 10-year prior-non-residence test, because you were UK-resident in the relevant years) but you do qualify for TRF provided you meet the Schedule 10 paragraph 1(4) to (6) conditions.

Settle this question first: it is binary, and your pre-2025-26 residence record decides it.

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Worked example: a legacy non-dom with substantial unremitted balances

Take a hypothetical legacy non-dom, Mrs Petrova. UK-resident since 2010-11 (15 years pre-FA-2025); a Russian national; non-UK-domiciled-of-origin; used the remittance basis throughout 2010-11 to 2024-25 with the standard £30,000 or £60,000 remittance-basis charge in each long-term year. At 6 April 2025 her pre-2025-26 unremitted offshore balances are:

  • £1.2m of accumulated foreign dividend and interest income (qualifies under Scenario A);
  • £700k of unrealised gains on offshore investments (does NOT engage TRF until the gain crystallises; capital growth itself is not foreign income or gain until realised);
  • £400k of clean-capital-equivalent holdings from a pre-UK-residence period (potential Scenario C);

Her designation plan: designate £1.2m unremitted foreign income under Scenario A in 2025-26 at 12% rate = £144k TRF charge. Designate £400k Scenario C in 2026-27 at 12% rate = £48k TRF charge. Total TRF charge: £192k. Total designated: £1.6m, which becomes clean capital available for free remittance.

Now the alternative without TRF. Bringing the £1.2m of unremitted foreign income onshore over time attracts remittance-basis tax at the underlying income rate. If the £1.2m is mostly accumulated dividends from offshore holdings, the marginal-rate tax on remittance is roughly 40% to 45% (£480k to £540k on the income slice alone). The £400k Scenario C clean-capital-equivalent might be partly treated as foreign income on remittance if its origin is mixed, costing further marginal-rate tax.

Net TRF saving on the income slice: £288k to £348k. The TRF charge is therefore one-third to one-quarter of the alternative cost. The Scenario C £400k slice adds further optionality value because clean-capital treatment removes any future doubt about the source-of-funds analysis.

The £700k unrealised gain on offshore investments is a separate question. If Mrs Petrova realises the gain during the TRF window (selling the underlying investments before 5 April 2028), the realised gain becomes a Scenario A or B amount and can be designated. If she delays realisation to post-2028, the gain is on standard CGT arising basis at 18% to 24%.

HMRC enquiry pattern and source-identification

HMRC's enquiries on TRF cases focus on source-identification: you have to pin down the exact amount designated and show that it is qualifying overseas capital under one of the three scenarios at paragraph 2. For long-running offshore portfolios with mingled remitted and unremitted balances, that tracing is genuinely hard. The sensible step is an FA-2025-tracing report on the portfolio that identifies which slices are pre-2025-26 unremitted income, which are pre-2025-26 unremitted gains, which are clean-capital-equivalent, and which are post-2025-26 (excluded from TRF). HMRC's RDRM is being rewritten for FA 2025 and will set out the detailed source-tracing rules, so check the current RDRM position before you designate.

The second risk area is the residence requirement. If you are mid-residence-transition in the year of designation (for example, a split-year departure), HMRC may challenge whether the residence condition at paragraph 1(4) is met for that year. Designate in a year of clear-cut UK residence rather than a split-year.

The interaction with foreign tax credit relief

Where the foreign jurisdiction has already taxed the underlying income at its own marginal rates, foreign tax credit relief may be available against your TRF charge. Schedule 10 paragraph 8 sub-paragraphs (3) and (4) provide the mechanism for taking foreign tax already paid into account on the designation. The relief runs through the standard double-taxation relief framework: typically Article 23 or 24 of the relevant UK bilateral treaty, or domestic FTCR under ITA 2007 section 30 where no treaty applies.

For high-tax jurisdictions (some EU countries with foreign-income taxation at 40% or more; certain US-style worldwide-taxation regimes), the foreign tax you have already paid can substantially offset the TRF charge, making the net cost very modest. For low-tax or no-tax jurisdictions (UAE, BVI, Cayman, Bermuda), the TRF charge is largely the full cost with no FTCR offset. Run the foreign-tax-paid analysis for the source jurisdiction of each designated amount: where substantial foreign tax has already been paid, it can pull your post-relief cost down from 12% to somewhere between 0% and 3%.

The cash-flow profile of the TRF charge

Schedule 10 paragraph 9 collects the TRF charge through the income tax system. The charge for a given year of designation lands in the income-tax payment cycle for that year: the balancing payment due on 31 January after the tax year end (for 2025-26 designations, 31 January 2027; for 2026-27, 31 January 2028; for 2027-28, 31 January 2029). So it falls on the standard self-assessment payment dates.

Make a £1m designation in 2025-26 at 12% and your £120,000 TRF charge is due on 31 January 2027. Plan that alongside your other 31 January obligations (the second payment on account for 2026-27, the balancing payment for 2025-26, anything else falling due). If your designation is very large, you might spread it across the three-year window for cash-flow reasons rather than rate reasons: the slightly higher 15% rate in year 3 can be a fair price for smoothing the cash out.

Where the rest of your FA 2025 position sits

The TRF is one piece of the wider reform. The qualifying-capital scenarios get fuller operational treatment, with worked source-identification examples, in their own guide. New arrivals should read the FIG regime instead. If you are weighing a CGT rebasing election, the IHT long-term-resident test under s.6A, or the offshore-trust mechanics under s.48ZA, those each turn on their own conditions and are worth taking separately.

Statutory and HMRC sources cited above: Finance Act 2025 section 41; Finance Act 2025 Schedule 10; Finance Act 2025 section 40 (remittance basis abolition); ITA 2007 section 809B (historic remittance-basis claim); ITTOIA 2005 section 832; TCGA 1992 Schedule 1; HMRC Residence, Domicile and Remittance Manual.