🇬🇧Remittance basis after 6 April 2025

Background: how the basis ended

The remittance basis was a fixture of UK taxation for two centuries. A UK resident who was non-domiciled paid tax on foreign income and gains only when the money reached the country. Finance Act 2008 put a price on the privilege through the remittance basis charge, and Finance (No. 2) Act 2017 layered deemed domicile on top after fifteen of the previous twenty years of residence. Each reform narrowed the regime without retiring it.

Jeremy Hunt announced abolition in the March 2024 Budget; Rachel Reeves confirmed and hardened it in the October 2024 Autumn Budget. From 6 April 2025 domicile stopped driving income tax, capital gains tax and, separately, inheritance tax. Residence took its place, measured by the Statutory Residence Test. The full repeal and its replacement sit in the non-dom abolition and UK tax residence entries; this page covers what former remittance-basis users still manage.

Concept

After 6 April 2025 the remittance basis is no longer the live default for new foreign income and gains. Its remaining role is transitional: identifying pre-6 April 2025 foreign income and gains, mixed funds, clean capital, prior remittance-basis claims and the Temporary Repatriation Facility.

This is general legal information, not individual tax advice. UK residence, treaty position, trust attribution, company residence and IHT exposure turn on facts and documents.

What survives the abolition

HMRC's RDRM71000 states that from 6 April 2025 it is no longer possible to use the remittance basis of taxation. Former remittance-basis users may still hold pre-6 April 2025 foreign income and gains that can be remitted and taxed unless designated under the TRF. HS264 sets out the Self Assessment treatment of pre-6 April 2025 remittances and of TRF designations.

This is for former remittance-basis users, trustees, family offices and clients with mixed offshore accounts, historical foreign income and gains, business investment relief history or trust benefit pools. A new resident with only post-6 April 2025 foreign income and gains starts on the FIG regime instead.

What replaced it: the FIG regime

New arrivals do not inherit the remittance basis; they get the four-year foreign income and gains regime instead. Someone non-UK resident for the ten consecutive tax years before arriving can claim full relief on foreign income and gains for the first four years of UK residence, even on amounts brought into the country. The mechanics sit in the FIG regime entry.

The relief carries a cost. Claiming it for a year forfeits the personal allowance and the capital gains tax annual exempt amount, and it has to be claimed year by year on the return. Employment income earned abroad runs on its own track through Overseas Workday Relief, rebuilt onto the same four-year footing and set out in the overseas workday relief entry.

The Temporary Repatriation Facility

The tracing test

The first question is whether the income or gain arose before 6 April 2025 while the individual was within remittance-basis history. The second is whether the account, asset or benefit represents qualifying overseas capital. The third is whether a TRF designation is available, valid and economically rational. Undesignated pre-6 April 2025 foreign income and gains can remain exposed to ordinary remittance charges if remitted.

Mixed funds and trusts

A former remittance-basis user with a mixed Swiss account containing 2022 foreign dividends, 2023 gains and clean capital cannot treat the whole account as clean merely because the remittance basis has ended. Mixed-fund ordering rules decide what is treated as remitted first. Former non-doms with offshore trusts have a separate settlements analysis: HMRC's TSEM4705 addresses trust income matching, and a distribution funded by protected foreign income may need matching before any remittance conclusion.

Inheritance tax moved with it

Inheritance tax changed basis on the same day. From 6 April 2025 worldwide assets fall within the IHT net once a person is a long-term resident, meaning UK resident in at least ten of the previous twenty tax years. Domicile and deemed domicile no longer decide exposure, and the move from the old fifteen-of-twenty rule to a ten-of-twenty test pulls people into worldwide IHT sooner. The domicile and residence in succession and inheritance tax map entries set the wider frame.

Leaving does not switch exposure off at once. A long-term resident keeps a tail of IHT on non-UK assets after departure, running from three years up to ten depending on length of residence. Offshore trusts lost their automatic excluded-property shelter: settlor residence now governs whether trust assets stay outside the net, as the trusts and inheritance tax entry explains.

Common mistakes

• Assuming the regime is irrelevant after abolition and remitting freely.
• Treating all offshore capital as clean capital without tracing.
• Paying the TRF charge from undesignated foreign income rather than clean funds.
• Losing the historical bank statements and remittance-basis returns needed to prove clean capital.
• Ignoring indirect remittances and trust-matching rules.

Evidence

Evidence includes historic remittance-basis returns, account statements, source-of-funds schedules, clean-capital computations, mixed-fund tracing, prior remittance-basis charge history, business investment relief documents, trust distribution records and TRF designation calculations.

Advisor trigger

A chartered tax adviser can handle clean-capital tracing and TRF modelling where records are complete. A UK tax solicitor should be involved where there are trusts, business investment relief history, missing records, prior non-disclosure or a contested clean-capital position.

Where this is heading

The planning arc now runs off two clocks. The Temporary Repatriation Facility is the cheap window: 12% on designated pre-6 April 2025 foreign income and gains through 2026/27, 15% in 2027/28, then it closes on 5 April 2028 and undesignated amounts revert to ordinary remittance charges. Designation and remittance can fall in different tax years, which makes sequencing the lever. The planning before UK residence and leaving the UK entries handle the entry and exit ends of the same arc.

HMRC's primary guidance is public: the four-year FIG regime guidance on GOV.UK and the Temporary Repatriation Facility manual at RDRM73400. Where records are thin or a remittance position is contested, the HMRC enquiries cleanup entry covers disclosure before designation.