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Overview

Subject to the remittance basis

Designation on behalf of a third party

Overview

Paragraph 1 Schedule 10 Finance Act 2025

The temporary repatriation facility (TRF) is only available to individuals who:

• are UK resident in the tax year of designation
• have previously been subject to the remittance basis for at least one tax year
• have ’qualifying overseas capitalâ€� (see RDRM72100 onwards) available to designate

UK residence is determined by the statutory residence test (SRT) â€� see RFIG20000Ìý´Ç²Ô·É²¹°ù»å²õ. If an individual is non-UK resident under the SRT for a tax year they are not eligible to make a designation election in that tax year.

Subject to the remittance basis

For tax years 2008-09 onwards, an individual having been ‘subject to the remittance basis� for a tax year means that section 809B, 809D or 809E ITA 2007 applied to the individual for that year. This means that an individual is eligible to use the TRF even if they did not make a claim for the remittance basis but instead it applied, for example, by their having less than £2,000 of unremitted foreign income and gains for a year. See RDRM32020 for claims under section 809B and RDRM32105 for exceptions to the claim under sections 809D and 809E.

For tax years before 2008-09, an individual having been ‘subject to the remittance basis� for a tax year means that in the tax year they had income or gains to which the remittance basis applied, whether it was applied automatically (to gains and employment income) or was claimed (for relevant foreign income) � see RDRM36005. It is not sufficient for an individual to have been not ordinarily resident or non-domiciled for that year; the remittance basis must have applied to income or gains arising in that year, or that would have arisen in that year but for the remittance basis applying.

Designation on behalf of a third party

Designations under the TRF are restricted to individuals that would otherwise have been taxable on the remittance of the income or gain. It is not possible for an individual or entity to make a designation of qualifying overseas capital that relates to an amount that they themselves would not otherwise be taxable on were the funds to be remitted. However, this does not prevent a person, such as an advisor, assisting an individual in the managing of their tax affairs by completing a return or making a payment.

Example 1

Amber and Romolo are both UK residents and former remittance basis users. They have been married to each other for 20 years.

On 6 April 2025 Amber transfers £150,000 of her foreign employment income from 2023-24 from her overseas bank account to Romolo’s overseas bank account, which he opened on 6 April 2025 and contains no other funds.

On 30 June 2025 Romolo spends £30,000 in the UK on hiring a venue in London, catering and entertainment for a wedding anniversary celebration, transferring the funds to the vendors from his overseas bank account containing Amber’s foreign employment income. This is a remittance of £30,000 which Amber would be taxable on, as it has been brought to the UK by a relevant person to her (see RDRM33030 for a definition of ‘relevant person�).

Even though Romolo is himself a UK resident and former remittance basis user and was the person who brought the funds to the UK, he cannot designate the £30,000 in his Self Assessment tax return for 2025-26. It is Amber who must either designate the £30,000 in her 2025-26 tax return and pay the TRF charge or pay tax on the remittance at the usual rate.

Example 2

Jared is 17 years old and has been UK resident and subject to the remittance basis since his arrival in the UK on 6 April 2020.

His father Riccardo has also been UK resident and subject to the remittance basis since 6 April 2020. In 2023-24 Riccardo sold overseas shares for £100,000 making a gain of £50,000. He used the funds to purchase a sports car which he keeps in Monte Carlo.Ìý

On 6 April 2025 Riccardo gives the car to Jared, because Riccardo has secured a 3-year contract working in Canada and will not have much use for it in that time. This is on the understanding that Jared will be responsible for paying all taxes on the car.

On 7 April 2025 Jared drives the car to the UK. When the car reaches the UK, this will be a remittance of the £50,000 gain, because it has been brought to the UK by a relevant person to Riccardo. Even though Jared has been gifted the car and is the one who brought it to the UK, the remittance still relates to a gain on which Riccardo is taxable.

Although Jared is UK resident in 2025-26 and a former remittance basis user, he is not eligible to use the TRF to designate the £50,000. It is Riccardo who will need to decide if he would like to make an election to designate this gain in his 2025-26 tax return.

Riccardo may find that due to his work and time spent in Canada he is non-UK resident for 2025-26, and for the remainder of the TRF period, so is not eligible to designate the gain at all. However, even though Riccardo may want it to be designated, for example, because the temporary non-residence rules may apply to him on his return (see RDRM32530), neither Jared nor anyone else is eligible to designate the £50,000 on his behalf.