The UK Temporary Repatriation Facility — 12% to 15%

The context

The UK's remittance-basis non-domiciled regime, in essence unchanged since 1799, was abolished with effect from 6 April 2025 by Finance Act 2025. From that date, all UK tax residents are taxed on worldwide income and gains, subject to two transitional reliefs: the new Foreign Income and Gains (FIG) regime (a four-year window of foreign-income exemption for new arrivers), and the Temporary Repatriation Facility (TRF) for legacy remittance-basis users.

Who can use the TRF

• Any individual who was taxed on the remittance basis for any tax year up to and including 2024-25 (the final remittance-basis year). This includes deemed-domiciles who had used the remittance basis before becoming deemed-dom.
• The individual must be alive at the time of designation (designations are not available posthumously) and must be UK tax resident or non-resident at the time of designation — both are fine.

What can be designated

• Foreign income and chargeable gains arising before 6 April 2025 that were untaxed in the UK on the remittance basis.
• Foreign chargeable amounts on protected settlements (and certain settlor-interested or transferor-interested foreign trusts) arising before 6 April 2025 — these were untaxed under the old protected-settlement rules and are now within scope.
• Cash, investments and other forms of foreign assets traceable back to designable income/gains.

The amount designated is the face value of the income/gain to be drawn down. There is no haircut for the original tax rate or for inflation.

The rates

The mechanics

Designation is made on the individual's UK Self-Assessment return for the year of designation. The taxpayer:

1. Identifies a sum of foreign income/gain arising pre-6 April 2025 (or a sum derived from such income/gain).
2. Designates it on the SA return for the relevant year.
3. Pays the 12% or 15% flat charge by the standard SA payment date.
4. Treats the designated amount as "clean capital" thereafter — it can be remitted to the UK or used in the UK without further UK income tax or CGT.

For amounts in trust, the trust-distribution rules are aligned so that designated amounts flow through without recharacterisation.

The UAE-residency play

UAE residency does not exclude an individual from the TRF — and indeed many high-value TRF users will be UAE-resident in the year of designation. The typical structure we see:

1. Individual ceases UK residence in 2024-25 or earlier and becomes UAE-resident under the FTA's tax-residency framework (90- or 183-day test, depending on factual ties).
2. While UAE-resident in 2025-26 or 2026-27, the individual designates substantial pre-April-2025 foreign income at 12%.
3. The designated amount is then either invested into UAE structures (DIFC family office, foundation, ADGM SPV) tax-free under the UAE regime, or held offshore in a clean-capital pool ready for future UK remittance if the individual returns.
4. If the individual returns to the UK during the FIG four-year window, future foreign income is sheltered under FIG for four years; legacy amounts are available remitted at 12%/15% already paid; everything is clean.

The trust trap

Pre-2025/26 protected-settlement structures had a specific tax-deferral mechanic that no longer works post-6 April 2025. A settlor-interested or transferor-interested foreign trust now exposes the settlor to UK tax on undistributed income and gains under the revised settlement-code, regardless of remittance. The TRF allows past undistributed amounts to be designated — but you must understand what was undistributed and what was already attributed.

For families with structured trusts (Jersey, Guernsey, BVI, Bermuda), the TRF year is the right time to re-engineer: terminate the trust, re-organise as a foundation, decant to a DIFC Foundation or ADGM Foundation, or distribute and designate.

What the TRF is not

The TRF does not:

• Apply to UK-source income — that remains taxable in the UK under standard rules.
• Apply to post-6 April 2025 foreign income — that is taxed under FIG (if eligible) or standard rules.
• Eliminate UK IHT exposure — the new long-term-resident IHT regime applies separately.
• Wash criminal source funds or under-declared income — designation is on a true and complete basis and HMRC retains its enquiry powers.

Where Neo Legal fits

The TRF is a UK tax matter — we coordinate with UK tax counsel for the technical designation. Our value is on the UAE side: we structure the UAE residency, the receiving family office or foundation, the corporate-tax-efficient on-shoring of designated capital, and the long-term integration with UAE Corporate Tax and FTA reporting.