Temporary repatriation facility: 12% rate

If you previously used the remittance basis as a non-dom, the Temporary Repatriation Facility is a time limited opportunity to bring historic wealth into the UK on favourable terms. It lets you designate foreign income and gains that were previously shielded from UK tax, creating a practical route to repatriate those funds.

For many former non-doms this is the first clear opportunity to unlock offshore income and gains without the full tax cost that would otherwise apply on remittance. If you intend to live, invest or spend in the UK, it can materially improve your liquidity and your longer term planning.

Why the facility matters

The value of the facility lies in its flat rates. You can designate qualifying amounts at 12% for the 2025/26 and 2026/27 tax years, rising to 15% for 2027/28.

That matters because the alternative may be exposure to the 45% additional rate. Consider £1,000,000 of foreign income.

Image 1 — the difference the facility makes

●       Taxed at the normal 45% rate, the UK charge would be £450,000.

●       Designated under the facility at 12%, the charge would be £120,000.

On that example the facility preserves £330,000 of wealth that would otherwise have gone in tax.

Who can use it

The facility is aimed at people who previously claimed the remittance basis, and who therefore hold foreign income and gains that were kept outside UK tax on the basis that they were not remitted.

You must be UK resident in the tax year in which you make the designation, so the first step is to confirm your residence position for the relevant year under the Statutory Residence Test.

How designation works

A technical point worth understanding concerns foreign tax credit relief. You cannot claim a foreign tax credit for overseas tax already paid on the designated income or gains. You are, however, permitted to deduct that foreign tax from the gross amount before the facility rate is applied.

Designation is not remittance

One of the most misunderstood aspects of the facility is that designating is not the same as remitting. When you use it, you are not required to physically bring the money into the UK at all. Instead you:

●       Designate the foreign income or gains on your self assessment return.

●       Pay the 12% or 15% tax on the designated amount.

●       Remit the funds whenever you choose, later or not at all.

Separating the tax payment from the cash flow is useful for planning. You might designate £5 million of offshore gains in 2025/26 and pay £600,000 in tax, while leaving the funds offshore for another three years as you work out your UK investment strategy. Once designated and taxed, those funds can come into the UK at any future point without a further UK charge.

It also means you can designate amounts you may want to bring in later, locking in the lower rate even if you are not yet certain about timing.

The deadlines

The facility operates within a strict filing timetable. The deadline for a claim is 31 January following the end of the relevant tax year.

Image 2 — the three years and their deadlines

The final opportunity to use the facility is therefore 31 January 2029, following the end of the 2027/28 tax year. If you are considering a designation, review the figures well before that closing date.

Questions to ask before you decide

●       How much do you hold offshore?  The larger the amount, the more meaningful the saving. On smaller balances the difference may not justify paying tax now on funds you may never bring to the UK.

●       How settled are your plans?  You must be UK resident in the year you designate, and the last available year is 2027/28. If you expect to be in the UK for the long term, the window is the constraint rather than your own timing.

●       Can you fund the tax now?  The facility requires you to pay the 12% or 15% on designation, whether or not you remit. You need the liquidity to do that, although the comparison with the rate that would otherwise apply is a favourable one.

The bottom line

If you are planning to settle in the UK permanently, and expect to invest in property, support your lifestyle or deploy capital here, the facility can be an essential liquidity tool. For former remittance basis users it may be one of the most efficient routes to bringing wealth into the UK.

It is not necessary in every case. If you are only in the UK for a short period and have no intention of ever bringing your capital here, a designation may simply not be needed.