The UK’s proposals for non-doms and their structures (as of 10 March 2025)

The UK’s new tax

The UK’s new tax regime for internationally connected individuals and their structures (as of 25 June 2025)CommentLinking access to the 4-year FIG regime to residence rather than domicile, and allowing people to bringrelieved income and gains into the UK without tax, should mean it is simpler to apply than the remittancebasis and gives greater certainty to taxpayers.It is available for a much shorter period than the previous remittance regime (4 tax years as opposed to amaximum of 15). However, where the 4-year FIG regime does apply, it is more generous than the remittancebasis was in a number of ways. In particular:• It is available to those who want to move to the UK permanently (the remittance basis was only availableto those who intend to leave the UK again); and• It completely exempts most forms of foreign income and gains from UK income tax and capital gains taxand allows them to be brought into and used in the UK without any further taxation.Rebasing reliefThere are two main transitional rules in relation to the income tax and capital gains aspects of the 4-year FIGregime for individuals.The first of these is a form of rebasing relief for individuals who have claimed the remittance basis in thepast. Where available, this can be used to rebase personally held foreign assets to their market value as of 5April 2017.The main criteria are as follows:• The individual must not have been UK domiciled or deemed domiciled prior to 6 April 2025;• The individual must have claimed the remittance basis for at least one tax year between 2017/18 and2024/25 (inclusive);• The asset to be rebased must have been held as of 5 April 2017 and be disposed of on or after 6 April2025; and• The asset must have been situated outside of the UK between 6 March 2024 and 5 April 2025.The separate rebasing relief which was introduced for those who became deemed domiciled with effect from6 April 2017 also continues to be available, albeit with slightly changed criteria.The Temporary Repatriation Facility (the “TRF”)Overview of the TRFThe second transitional rule is the Temporary Repatriation Facility, referred to as the “TRF”.This is available to anyone who is UK tax resident and has been subject to the remittance basis in any taxyear up to and including 2024/25 (so including those who are already deemed domiciled).Note that a person may have been “subject to” the remittance basis without having made a claim for it (andin fact without even being aware of it, particularly if they were a child at the time).The TRF is available in three tax years (2025/26, 2026/27 and 2027/28) and can, at its simplest, be thoughtof as a regime which:• allows foreign income and gains which have arisen under the previous remittance basis prior to 6 April2025 to be taxed at a flat rate of either 12% or 15% (depending on the year) and be remitted into the UKwith no further tax charge; and• allows trust distributions made between 6 April 2025 and 5 April 2028 to also be taxed at either 12% or15% (depending on the year) to the extent they “match” to income and/or gains which arose in the truststructure prior to 6 April 2025.6

The UK’s new tax regime for internationally connected individuals and their structures (as of 25 June 2025)In each case the flat rate is known as the “TRF Charge” and will vary by tax year as follows:Tax yearTRF Charge2025/26 12%2026/27 12%2027/28 15%Whilst there are similarities in how the TRF applies in each of the two use cases described above, there arealso sufficient differences that it is arguably better thought of as two sub-regimes. To avoid confusion thisarticle uses the labels:• The “Personal TRF” when referring to the TRF used to reduce the tax rate on foreign income and gainswhich arose under the previous remittance basis regime; and• The “Trust TRF” when referring to the TRF used to reduce the tax rate on distributions made from trustsin the tax years 2025/26 – 2027/28.The “Personal TRF” in more detailCriteria to be availableWhat it can apply toHow to claimEffect of a claimThe individual must have been subject to the remittance basis prior to 6 April 2025.They must also have had at least some unremitted foreign income and gains as of 5April 2025.The Personal TRF can be used on two key categories of foreign income and gainswhich arose prior to 6 April 2025 whilst the individual was a remittance basis user:• Foreign income and gains which are as yet unremitted; and• Foreign income and gains which are remitted in any of the 2025/26 – 2027/28tax years (i.e. it can be claimed retrospectively).It can apply to foreign income and gains in any form (so both cash and in-specieassets).A claim must be made to “designate” the relevant foreign income and gains as “TRFCapital” in a tax return.The deadline is 31 January two years after the end of the relevant tax year (so adesignation for 2025/26 must be made by 31 Jan 2028).The Personal TRF effectively converts the designated foreign income and gains intoclean capital for most purposes.In exchange for this, the taxpayer is liable for the “TRF Charge” on the amountdesignated. The TRF Charge is 12% (for 2025/26 and 2026/27) or 15% (for 2027/28).The TRF Charge replaces the normal income tax/capital gains tax charge which wouldarise on a remittance of the designated funds so there is then no further tax to pay.The charge is effectively added to the individual’s income tax liability and so is payableby 31 January after the end of the relevant tax year (e.g. the TRF Charge for 2025/26will be due by 31 Jan 2027).If a designation is made after that deadline (noting that the time limit for designationis 31 January two years after the end of the relevant tax year) then there will also beinterest to pay on the TRF Charge.One downside of using the Personal TRF is that the individual loses the ability to claimforeign tax credits on the designated amount.7