The Temporary Repatriation Facility is a three-year window for legacy non-dom remittance-basis users to bring their pre-2025-26 unremitted offshore balances onshore at favourable fixed rates. The substantive architecture lives in Finance Act 2025 Schedule 10; section 41 is the introducing provision. The window opens with the 2025-26 tax year and closes on 5 April 2028. After that date, legacy unremitted balances brought onshore are taxed under the standard remittance-basis rules at full marginal rates; the favourable-rate route is closed.

For the population of UK-resident non-doms who claimed the remittance basis pre-2025-26 and have substantial unremitted income or gains still offshore, the TRF is the single largest planning lever in the Finance Act 2025 package. The favourable rates (12% in years 1 and 2; 15% in year 3) typically deliver substantial savings against the alternative of paying remittance-basis tax at marginal rates on later remittance. This page covers the s.41 plus Schedule 10 architecture, the three qualifying-capital scenarios, the rate ramp, the designation deadlines, the partial-designation mechanic, and a worked decision framework.

For the eligibility and election mechanics of the parallel FIG regime (which serves new arrivals not legacy non-doms), see the FIG eligibility pillar and the FIG election-mechanics page.

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." The section is a one-line introducer; all the substantive provisions are in Schedule 10. The structure 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 on designated amounts. 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" rather than a literal remittance. The election is made in the self-assessment return for the relevant tax year (2025-26, 2026-27, or 2027-28); the underlying capital does not need to physically move from offshore to UK at the time of designation. The clean-capital effect attaches to the designated amount; the individual can then move the actual capital onshore at any later date with no UK tax on the remittance. The decoupling of designation from physical remittance is structurally important: it lets the individual lock in the favourable TRF rate without forcing immediate capital movement, accommodating offshore portfolios that the individual wants to retain at their non-UK booking centre for operational or family reasons while still crystallising the legacy UK tax 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 is calibrated to be substantially below the marginal income-tax rate (40% to 45%) that would otherwise apply on remittance of foreign income, and below the CGT rate (18% to 24%) that would apply on remittance of foreign gains. The 15% rate in 2027-28 maintains a meaningful discount but provides a sunset incentive: individuals who delay designation to the third year pay a 25% premium on the rate (15% vs 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. The individual must: (i) be UK-resident in the year of designation; (ii) make the designation in the self-assessment return for that year; (iii) have been previously subject to the remittance basis (ITA 2007 section 809B) for at least one pre-2025-26 tax year, with unremitted balances qualifying as overseas capital under paragraph 2.

The residence requirement is binding. A legacy non-dom who emigrates partway through the TRF window is no longer eligible for designation in any year after they cease UK residence. The route closes for them at the point of departure; their unremitted offshore balances stay subject to the standard remittance-basis rules for any post-departure remittance.

The remittance-basis-history requirement is the gateway that excludes new arrivals using FIG. A new arrival in 2025-26 has no pre-2025-26 UK-residence record (the s.845B(1)(c) 10-year prior-non-residence test was satisfied), 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; an individual is either 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: the individual brings the pre-2025-26 balance onshore during the TRF window and designates 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, was held by the individual immediately before 6 April 2025, AND 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.

The three-category definition gives flexibility. A legacy non-dom with a mixed offshore portfolio (some clear remittance-basis income; some accumulated capital gains; some clean-capital-equivalent holdings) can designate amounts under each category in the same or different tax years. The total designated across all categories and all years is what gets the clean-capital treatment; the TRF charge is computed 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."

The deadlines therefore work out as: 2025-26 designations must be made by 31 January 2028; 2026-27 designations by 31 January 2029; 2027-28 designations by 31 January 2030. The deadline aligns with the FIG claim deadline at s.845A(5) (the same 12-month-from-31-January structure). Late designations are not permitted; the standard TMA 1970 amendment routes (s.9ZA standard amendment; s.43 4-year discovery amendment) do not extend the TRF window itself, although they may allow late filing of a missing return where the designation was intended but not filed.

Partial designation and per-year flexibility

Designation is per-amount, not per-source. An individual with a £500k offshore unremitted balance can designate £200k in 2025-26 and the remaining £300k in (say) 2027-28; the £200k is taxed at 12% and the £300k at 15%, total TRF charge £24k plus £45k = £69k. Alternatively, designating all £500k in 2025-26 at 12% gives £60k total TRF charge; the front-loaded approach saves £9k. The trade-off is the cash-flow timing: paying £60k of TRF charge in January 2028 (the payment date for 2025-26 designations) vs spreading the cash flow across January 2028 and January 2030.

Designation is also per-year. The individual can spread the designation across all three years of the window or front-load into year 1; the choice is made at the time of each annual return. Sessions advising should run the present-value calculation: the 12% rate in years 1 and 2 is structurally cheaper than the 15% rate in year 3, but the cash-flow cost of front-loading may be material for some clients.

The clean-capital effect post-designation

Once a slice of qualifying overseas capital is designated and the TRF charge is paid, the slice 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 (foreign-income remittance trigger) on the actual remittance of the designated amount. Part 3 disapplies the CGT charge that would otherwise apply under TCGA 1992 Schedule 1 on the remittance of the designated amount.

The clean-capital status is permanent. An individual who designates £500k in 2025-26 can hold the capital offshore for any period after designation and then bring it onshore in 2027-28, 2030-31, or any later year; the remittance is UK-tax-free. The status also survives changes in the individual's residence (a UK-resident designator who later emigrates retains the clean-capital status on any later remittance back to the UK if they return).

The distinction from FIG: not for new arrivals

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

A new arrival in 2025-26 who qualifies for FIG does not need TRF. Their post-2025-26 foreign income is FIG-exempt during the four-year window, and they have no pre-2025-26 UK tax history to clean up. A legacy non-dom who used the remittance basis pre-2025-26 does not qualify for FIG (they fail the s.845B(1)(c) 10-year prior-non-residence test because they were UK-resident in the relevant years) but does qualify for TRF if they meet the Schedule 10 paragraph 1(4) to (6) conditions.

The two populations should be classified clearly at the outset of any advice engagement. The FIG-vs-TRF question is binary and determined by the individual's pre-2025-26 residence record.

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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.

The alternative without TRF. Bringing the £1.2m of unremitted foreign income onshore over time would attract remittance-basis tax at the underlying income rate. Assuming the £1.2m is mostly accumulated dividends from offshore holdings, the marginal-rate tax on remittance is approximately 40% to 45% (£480k to £540k on the income slice alone). The £400k Scenario C clean-capital-equivalent might be partially 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 enquiry pattern on TRF cases focuses on source-identification: the designated amount must be specifically identified, and the individual must demonstrate that the amount is qualifying overseas capital under one of the three scenarios at paragraph 2. For long-running offshore portfolios with mingled remitted and unremitted balances, the source-tracing is non-trivial. Standard practice will run an FA-2025-tracing report on the offshore portfolio identifying 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; sessions advising on TRF designations should verify the current RDRM position at write time.

The second risk area is the residence requirement. Where the individual is mid-year-residence-transition (e.g., the year of the designation is a split-year departure), HMRC may challenge whether the residence condition at paragraph 1(4) is satisfied for the year of designation. Best practice is to 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 the 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 operates 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 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 without FTCR offset. Sessions advising should run the foreign-tax-paid analysis for the source jurisdiction of each designated amount; the calculation can shift the post-relief cost from 12% to 0% to 3% on jurisdictions with substantial foreign tax already paid.

The cash-flow profile of the TRF charge

Schedule 10 paragraph 9 provides that the TRF charge is collected via 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). The cash-flow profile is therefore aligned with the standard self-assessment payment dates.

For an individual making a £1m designation in 2025-26 at 12% rate, the £120,000 TRF charge is due on 31 January 2027. The cash flow should be planned alongside other 31 January obligations (the second payment on account for 2026-27; the balancing payment for 2025-26; any other annual settlements). For very large designations, sessions advising may consider spreading across the three-year window not for rate reasons but for cash-flow management; the slightly higher 15% rate in year 3 may be acceptable for some clients in exchange for cash-flow smoothing.

What this page does not cover

This page is the TRF pillar. It does not cover: the qualifying overseas capital depth (the dedicated A5 companion in this Wave 8 cluster covers the three scenarios in operational detail with worked source-identification examples); the parallel FIG regime for new arrivals (the FIG eligibility pillar and election-mechanics pages cover); the CGT rebasing election for narrow non-dom eligibility (the dedicated rebasing page covers); the IHT LTR test (the s.6A pillar covers); the offshore-trust s.48ZA mechanics (the EPT companion covers).

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.