🇬🇧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 available 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.

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 is taxed on the arising basis, subject to a FIG claim if eligible.

What replaced it: the FIG regime

New arrivals do not inherit the remittance basis; qualifying residents may claim relief under 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 window runs from arrival, not from 6 April 2025: s 845B(3)(c) ITTOIA 2005, inserted by s 37 Finance Act 2025, treats 2022-23, 2023-24 and 2024-25 as qualifying tax years, so an arrival in one of those years claims the residual years from 2025/26 — 2025/26 alone for a 2022/23 arrival — while residence beginning before 2022/23 gives no access at all. 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

Access is narrower than the rate suggests. The designation election can only be made in the Self Assessment return; the individual must be UK resident in the year of designation; and the facility is open only to someone who was on the remittance basis for at least one year before 2025-26. For trust capital payments, identify each designation basis before claiming the available reliefs. The facility remains compatible with a fresh FIG window. The detailed treatment of that machinery belongs in a separate entry; the wider frame is in the non-dom reform.

For anyone with open historic periods there is a further effect. The TRF charge paid is credited against income tax or capital gains tax charged for 2024-25 or an earlier year following an enquiry amendment, a closure notice or a discovery assessment. The other side of that credit is that the designation can no longer be altered or revoked. A separate rule applies where the foreign tax on a designated amount was paid out of other funds.

CGT rebasing to 5 April 2017

Alongside the TRF sits a separate transitional CGT relief. When a former remittance-basis user disposes, on or after 6 April 2025, of a foreign asset held personally on 5 April 2017, the acquisition cost is rebased automatically to the asset's market value on that date; the individual may instead elect, disposal by disposal and irrevocably, for rebasing not to apply (Schedule 11 to Finance Act 2025, paragraphs 1 and 3). Rebasing applies where the remittance basis was claimed under s 809B ITA 2007 for at least one tax year from 2017-18 to 2024-25, the individual was never UK domiciled, deemed domicile included, before 6 April 2025, and the asset was not situated in the UK at any time from 6 March 2024 to 5 April 2025.

The point of the relief is that growth accrued up to 5 April 2017 drops out of charge. For long-held foreign assets that have appreciated substantially, rebasing can be worth more in absolute terms than a TRF designation, so the two options are modelled together, asset by asset, before deciding what to designate and what to sell.

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. The layers Finance Act 2026 added to that perimeter — the cap on trust charges, the disapplication of the exit-charge exemptions and pensions from 6 April 2027 — are set out in the non-dom reform.

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.
• Making only one designation where a capital payment qualifies both under a remittance provision and through trust-gains matching and relief on both grounds is needed.
• Making the election outside the Self Assessment return, or for a year in which the individual was not UK resident.
• 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, with 2027/28 the last designation tax year. The election deadline for that year is 31 January 2030; undesignated amounts may remain taxable on remittance. Designation and remittance can fall in different tax years, which makes sequencing the lever. The second movement is legislative: Finance Act 2026 rewrote Schedule 10 to Finance Act 2025 and provided that the amendments are deemed always to have had effect, so anyone who already designated on a 2025-26 return is rebuilding the computation under the new rules rather than applying them from next year. 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 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.

Abolition did not erase the old foreign income and gains. Trace each offshore pool into clean capital, taxable amounts and designation candidates, and distinguish the TRF designation year from the election deadline and the later remittance date. Qualifying designations relate to 2025/26, 2026/27 or 2027/28; designated capital does not have to be remitted during that period. The dates and sequencing are set out in TRF designation mechanics.