Are you an Expat? Have you been living in the UK for a while? Could it be possible that you like the British weather so much that you want to stay in the UK for a longer period than expected? Perhaps you may want/need to access monies in the UK that have previously been untaxed. If so, read on…

On 6 April 2025, the UK’s tax law changed significantly. Two of the key changes were:

1. To abolish the remittance basis of taxation for non-domiciled and non-deemed domiciled individuals.
2. To remove certain protections benefitting offshore trusts, which effectively mean that, for most UK resident settlors of non-UK trusts, those trusts are now “transparent” with income and gains of the trust being immediately taxed on the settlor.

As a temporary concession to help affected individuals arrange their tax affairs, the UK government has introduced a new TRF. This creates opportunity, but you must act quickly.

So, what is the TRF?

The TRF allows eligible individuals to designate certain historic offshore income and capital gains as “qualifying overseas capital” and pay a flat UK tax charge on those designated amounts at concessionary, lower tax rates.

Qualifying overseas capital is, very broadly, a term used to describe two types of pre-6 April 2025 income and capital gains:

• Non-UK source income and capital gains that arose to an individual personally, but during a year in which they claimed the remittance basis of taxation and so were shielded from UK tax at the time, and which have not subsequently been brought to the UK and therefore remain untaxed.
• Income and capital gains that arose in a non-UK trust structure, and which would otherwise be “matched” to a capital distribution made in the TRF window at a UK beneficiary’s marginal income tax and capital gains tax rates (up to 45%) under the UK’s complex anti-avoidance regime for trusts.

The TRF rates are:

• 12% where the designation is made in 2025/26 or 2026/27
• 15% where the designation is made in 2027/28

So, the one-time TRF window runs for three tax years.

TRF is a time limited opportunity to pay tax at a flat rate of 12% or 15% on funds that would otherwise be taxed at up to 45% if they were remitted to the UK and/or received from a trust.  

Once designated, the amounts can be remitted to the UK later without a further UK tax charge.

Who can benefit?

In broad terms, the TRF is for UK resident individuals who were subject to the remittance basis in at least one tax year before 2025/26, and who either have qualifying amounts to designate personally or who will receive a capital distribution from a non-UK trust before 5 April 2028.

You can only make a designation election in a Self-Assessment tax return for 2025/26, 2026/27 or 2027/28, and you must be UK resident in the year of designation.

What should you be doing, NOW:

1. Quantify and evidence your “historic offshore pot”: Identify what part of your offshore wealth is pre-6 April 2025 income/gains that could be taxable if remitted.
2. Consider trust benefits you might receive: If you are a trust beneficiary (including a settlor who is also a beneficiary), coordinate with trustees about the timing and nature of any capital payments or benefits during 2025/26–2027/28, as this can affect whether TRF is available and at what rate.
3. Factor in foreign tax: TRF is a stand-alone tax charge, and no foreign tax credit relief is available against the payment