The Temporary Repatriation Facility – A new opportunity for former non-doms
There has been a lot of focus on the abolition of the ‘non-dom’ regime and the impact on former non-doms who are now subject to UK tax on their worldwide assets.
This is a significant change, which we consider in our note "How to invest as a former non-dom". However, it is important not to overlook a new relief which could benefit former non-doms: the Temporary Repatriation Facility (TRF).
Here, we outline the key terms of the TRF and how Rothschild & Co can assist with its implementation and investing the funds it releases. While we do not provide tax advice, we work closely with expert tax advisers on the technical details of the TRF.
What is the TRF?
The non-dom regime enabled individuals to retain the income and gains from their non-UK investments offshore and not pay any tax unless or until these sums were brought to the UK. There was often also a similar tax deferral opportunity in respect of non-UK assets held in offshore trusts.
Although this enabled funds to grow offshore and be spent outside the UK, it meant there was a tax penalty if the funds were remitted to the UK. As a consequence, in many cases, the funds could be ‘trapped offshore’ - a taxpayer might wish to spend or invest in the UK, but was discouraged from doing so by the consequential tax charges.
The TRF is, in effect, a tax amnesty. For the tax years 2025-26 to 2027-28 inclusive, former non-doms can elect to pay tax at the rate of 12% (rising to 15% in 2027/28), in respect of their offshore income and gains, enabling those monies to be brought into the UK without further tax charges. However, there is no obligation to do this.
Individuals take part in the TRF by selecting which income, gains or assets they wish to benefit from the reduced tax rate. It is also possible to use the TRF in respect of certain offshore trusts.
Your tax adviser can provide full details on the TRF and help you consider if you should take advantage of it and, if so, to what extent. If you do not have a tax adviser, we would be happy to introduce you to a suitable expert.
For the tax years 2025-26 to 2027-28 inclusive, former non-doms can elect to pay tax at the rate of 12% (rising to 15% in 2027/28), in respect of their offshore income and gains."
How we can help
The TRF provides an opportunity to release funds at an attractive tax rate. While appropriate tax advice will be critical to make optimal use of the TRF, Rothschild & Co can help in a number of ways.
In many cases, the first step is to open a new offshore bank account, known as a TRF Capital Account, to hold the funds nominated for the TRF. This can help you identify and track the use of these funds.
Once the TRF has been activated, there will be no more tax on those funds and you will be able to deploy them in or outside the UK. We can assist with setting up and managing your new offshore account, while also working with you to determine how best to invest the released funds in line with your long-term objectives.
While there will be no further tax on the funds themselves once the TRF has been paid, any profits from the reinvestment of those funds will be subject to tax if you are a UK resident. This will compare unfavourably to the prior position, if you were formerly a non-dom taxed on the remittance basis.
For this reason, your tax adviser may suggest that you consider holding your investments via a ‘wrapper’. A wrapper is a holding vehicle – such as a family investment company (FIC), an offshore bond, or an open-ended investment company (OEIC) – which allows your investments to grow in a tax-efficient manner.
We can assist you in the selection of an appropriate wrapper and have considerable experience managing funds in these structures.
Investing for growth
In the right circumstances, the TRF can provide a practical way to unlock offshore funds and invest them for the future, both inside or outside the UK.
Exploring this relief with your tax adviser may help you make the most of an opportunity that is only available for a limited time.
Ready to begin your journey with us?
Past performance is not a guide to future performance and nothing in this article constitutes advice. Although the information and data herein are obtained from sources believed to be reliable, no representation or warranty, expressed or implied, is or will be made and, save in the case of fraud, no responsibility or liability is or will be accepted by Rothschild & Co Wealth Management UK Limited as to or in relation to the fairness, accuracy or completeness of this document or the information forming the basis of this document or for any reliance placed on this document by any person whatsoever. In particular, no representation or warranty is given as to the achievement or reasonableness of any future projections, targets, estimates or forecasts contained in this document. Furthermore, all opinions and data used in this document are subject to change without prior notice.
