Temporary Repatriation Facility: A Guide for UK Expats

What Is the Temporary Repatriation Facility?

The temporary repatriation facility (TRF) is a transitional relief introduced alongside the abolition of the non-domicile tax regime on 6 April 2025. It allows individuals who previously used the remittance basis to bring their historic offshore income and gains into the UK at a significantly reduced flat tax rate, rather than paying standard income tax or capital gains tax rates when those funds eventually reach the UK.

Before April 2025, non-domiciled individuals could keep their foreign income and gains outside the scope of UK tax as long as they did not remit them to the UK. The remittance basis has now been abolished. For those with years of accumulated offshore wealth, the TRF is the government's offer: settle now at 12% rather than face a potentially far larger bill later.

The TRF runs across three tax years: 2025/26, 2026/27, and 2027/28. It closes permanently on 5 April 2028. After that date, any previously unremitted foreign income or gains brought to the UK will be taxable at the individual's normal rates — income tax rates of up to 45%, or current capital gains tax rates, with no reduced facility available.

Who Can Use the Temporary Repatriation Facility?

The TRF is not available to everyone. Three conditions must all be satisfied in the tax year you make the designation:

1. UK tax resident in the designation year. You must be UK resident under the Statutory Residence Test (SRT) for the tax year in which you make the designation. If you are currently non-resident and living in Dubai, you cannot yet use the TRF — but you may be able to designate in a later TRF year once you become UK resident.
2. Previously used the remittance basis. You must have been taxed on the remittance basis in at least one prior tax year. Individuals who were always taxed on the arising basis (i.e. they never used the remittance basis) do not have qualifying overseas capital to designate.
3. Qualifying overseas capital available. You must have pre-6 April 2025 foreign income or gains that were shielded by the remittance basis and have never been remitted to the UK. Income or gains already brought to the UK before April 2025 have already been taxed or are outside the remittance basis — they cannot be designated under the TRF.

If you are a UAE-based expat who used the remittance basis during periods of UK residence and accumulated substantial offshore income, you are likely to have qualifying overseas capital. The TRF is particularly relevant for UAE expats planning to return to the UK in the next few years.

Before you designate, confirm your UK residency position. If you are spending increasing time in the UK, your day count matters. Use our SRT day counter to track your UK days and understand when you become UK resident under the Statutory Residence Test.

TRF Tax Rates: 2026/27 and 2027/28

The TRF charge applies at a flat rate on the amount designated. No personal allowance, basic rate band, or other income tax reliefs apply — it is a standalone flat charge. The rates, confirmed by HMRC in RDRM73400, are:

To put the rates in context: if you have £200,000 of pre-April 2025 foreign income that was never remitted to the UK, designating it under the TRF in 2026/27 results in a charge of £24,000 (12%). If you wait, bring that money to the UK after April 2028 as a higher-rate taxpayer, and it is treated as income, the bill could be up to £90,000 (45%). The TRF offers a material reduction in exchange for settling now.

What Counts as Qualifying Overseas Capital?

Qualifying overseas capital for TRF purposes is defined as pre-6 April 2025 foreign income or gains that arose in a year when you were subject to the remittance basis, and which have never been remitted to the UK. This can include:

• UAE bank account balances representing accumulated foreign employment income or business profits earned while using the remittance basis
• Offshore investment income — dividends, interest, and rental income from non-UK properties that was shielded under the remittance basis
• Foreign capital gains — proceeds from the disposal of non-UK assets where the gain was never remitted
• Mixed funds in offshore accounts — where clean capital calculations are needed to establish the qualifying portion

The following do not qualify as TRF capital: income or gains that have already been remitted to the UK (these have already been taxed or are outside the remittance basis); post-6 April 2025 foreign income and gains (these fall under the FIG regime); and UK-source income (this was never eligible for the remittance basis).

How to Designate: Step by Step

The TRF designation is made through your UK Self Assessment tax return. The process involves six steps:

1. Confirm UK residence. Check your SRT position for the relevant tax year. Designation requires UK residence in that year.
2. Identify qualifying overseas capital. Gather records of all pre-April 2025 foreign income and gains that were shielded under the remittance basis and have never been remitted. You will need a breakdown by income type (income vs capital gain) as these may be subject to different considerations.
3. Deduct overseas tax paid. If you paid tax on any of the qualifying amounts in the overseas country, you can deduct that tax from the gross amount before applying the TRF rate. This reduces your charge. Note: you cannot claim a Foreign Tax Credit separately — the deduction from the gross amount is the only relief available.
4. Calculate the TRF charge. Apply 12% (2026/27) or 15% (2027/28) to the net designated amount. This is your TRF liability for the year.
5. Complete the designation election on your Self Assessment return. State the total amount designated. Identify which amounts, if any, were physically remitted to the UK during the tax year.
6. Pay by 31 January. The TRF charge is treated as income tax for the relevant year and is payable via Self Assessment by 31 January following the end of that tax year.

Once you have made a valid designation, the charge is fixed. No further UK tax arises on those designated funds when they are eventually remitted to the UK, regardless of when that remittance happens.

The Key Misunderstanding: Designation Is Not Remittance

Most articles about the Temporary Repatriation Facility describe it as a route to "bring money back to the UK cheaply." That framing is accurate but incomplete and leads many UAE expats to dismiss TRF as irrelevant because they are not planning to move funds to the UK any time soon.

The correct framing is this: the TRF is a pre-clearance mechanism. You pay a flat charge now, and in exchange, the funds are cleared for future remittance at no additional cost. The money can remain in your UAE bank account, offshore investment portfolio, or DIFC brokerage for years or decades after designation. The designation does not trigger a requirement to move anything.

This is particularly relevant for UAE expats with illiquid offshore assets. Suppose you hold a UAE property purchased from pre-April 2025 foreign income, and you expect to sell it in five to ten years. You can designate the relevant historic income now at 12%, pay the charge, and when you eventually sell the property and bring the proceeds to the UK, there is no further UK tax on those designated funds. Without TRF designation, the same proceeds arriving in the UK after April 2028 could trigger an income tax charge of up to 45%.

What the TRF Does Not Cover

The TRF has a defined scope. It is important to understand what falls outside it so you are not misled about the relief you are entitled to:

• Post-6 April 2025 foreign income and gains. Any foreign income or gains arising after the abolition of the remittance basis cannot be designated under TRF. These are governed by the Foreign Income and Gains (FIG) regime if you are a qualifying new UK resident, or by normal arising basis rules if you do not qualify.
• Income already remitted to the UK. If foreign income or gains were brought to the UK before April 2025, they are outside the TRF. They have either been taxed already (if remitted and declared) or the remittance has already occurred and the charge point has passed.
• UK-source income. The remittance basis never applied to UK-source income — salary from UK employment, UK rental income, UK dividends. None of this can be designated under TRF.
• Amounts previously nominated under the remittance basis. Nominated income and gains (used in prior years to satisfy the Remittance Basis Charge) have complex interactions with the TRF. Take advice before designating amounts involving nominations.

Foreign Tax and the TRF Charge

If you paid tax in an overseas country on the foreign income or gains you wish to designate, you cannot claim a standard Foreign Tax Credit against the TRF charge. However, HMRC does allow you to reduce the designated amount by the overseas tax already paid before applying the TRF rate.

For example: you have £120,000 of pre-April 2025 foreign investment income on which the overseas jurisdiction withheld £20,000 in tax. The net amount available is £100,000. You apply the TRF rate of 12% to £100,000, giving a TRF charge of £12,000. If you had to apply the full 12% to the gross £120,000, the charge would be £14,400.

The practical impact depends on whether the overseas country taxed the income at source. UAE-resident individuals holding assets in the UAE generally will not have had overseas income tax deducted (the UAE has no personal income tax), so the full gross amount will typically be the designated amount.

How Alto Accounting Can Help

Calculating your qualifying overseas capital, identifying mixed fund positions, and making an accurate TRF designation requires a detailed review of your remittance basis history and offshore asset structure. An error in the designation — either over- or under-designating — can result in an incorrect charge or future remittance tax exposure.

Alto Accounting works with UK expats in the UAE on TRF planning, FIG regime elections, and UK Self Assessment filings. We help you establish your qualifying pool, run the numbers across the remaining TRF years, and make the most of the window before it closes in April 2028.

Book a free consultation to speak with a specialist.

Frequently Asked Questions