INTM603685 - Transfer of assets abroad: 6 April 2025 non-UK domicile reforms: Removal of the remittance basis of taxation ITA07/S735
From 6 April 2025, the application of the remittance basis of taxation for individuals who are non-UK domiciled was removed and from this date any individual who is UK resident and receives a benefit that is taxable under ITA07/S731 of the ToAA provisions will be taxable on the arising basis unless the individual comes with the 4-year FIG regime and make a claim for the relevant tax year (see RFIG41000 onwards for guidance on this new regime).
For individuals who claimed the remittance basis for tax years prior to 2025 - 2026, the remittance basis will continue to apply to any benefits received which were matched with relevant foreign income that arose in those years and these benefits will only be taxable if remitted to the UK. Guidance on how the remittance basis affected the taxation of non-UK domiciled individuals subject to a benefits charge under ITA07/S731 can be found at INTM602100 onwards.
Individuals who have used the remittance basis can take advantage of the Temporary Repatriation Facility (TRF) during the years 2025 - 2026 to 2027 - 2028 to designate unremitted benefits and pay a reduced level of tax them. For details of the TRF see RDRM71000 onwards.
ITA07/S735 has also been extended as part of the 6 April 2025 reforms to include “qualifying new residents”. If an individual is a qualifying new resident, they are entitled to claim in their first 4 years of residence a relief from tax on their foreign income. The amendment to ITA07/S735 means that any income assessable under ITA07/S731 that would be treated as relevant foreign income if it were the individual’s will be relieved from tax if the individual is a qualifying new resident and makes a claim for relief. The income that comes within such a claim can be found in the table at ITTOIA05/S845F which defines what is “qualifying foreign income”. Further details of the 4-year FIG regime and how an individual can be a qualifying new resident can be found at RFIG44000.