RDRM74500 - Temporary repatriation facility: Scope of designation: Amounts held by third parties
It is possible to designate amounts under the temporary repatriation facility (TRF) that are held by third parties. This is not limited to amounts held by ‘relevant persons’ (see RDRM33030 for a definition of relevant person). In most cases, however, they will be held by relevant persons, but amounts held by other persons may be within scope if those amounts would be remitted by virtue of Condition C or Condition D of section 809L ITA 2007.
In order for an amount held by a third party to meet the definition of ‘qualifying overseas capital’ (see RDRM72100 onwards) the individual must be able to identify their foreign income and gains that the third party holds. These may be amounts that are, or are derived from, the individual’s foreign income and gains. This does not apply to unattributed foreign income and gains held in overseas structures which are treated as qualifying overseas capital – see RDRM72500. Uncertain amounts (see RDRM72300) that were not held by the individual on 6 April 2025 cannot be designated.
For guidance on designating amounts that were invested in a UK company on which business investment relief (BIR) was claimed see RDRM74700 onwards.
Only the individual that would be chargeable were the foreign income and gains to be remitted can make the designation on the amounts held by the third party; the person who holds the funds or asset cannot make a designation on their behalf - see RDRM73200.
Example 1 – uncertain amounts
Lucia is a former remittance basis user. She has been UK resident since she came to the UK on 6 April 2010. On 6 April 2025 she decides to designate all of her pre-6 April 2025 foreign income and gains. She reviews her records and identifies that in addition to holding funds in overseas bank accounts, she has gifted various amounts to other individuals.
Lucia’s records show that on 30 March 2012 she transferred £300,000 to her husband Gabriel’s Swiss bank account from her Italian bank account, which he used to purchase a classic car, kept at their apartment in Geneva. Lucia’s records show that her Italian bank account is a mixed fund, and she has comprehensive records of the amounts that have been transferred in and out of the fund since the 2013-14 tax year, but she is unsure what the funds in the account on 30 March 2012 were. She thinks it could have been foreign dividend income from 2011-12, but she also received an inheritance that year, and is not sure which of her overseas accounts the dividend and inheritance were paid into.
As Lucia cannot identify the funds that she gifted to Gabriel, she cannot designate them under the TRF as she did not hold them at 6 April 2025, so they are not qualifying overseas capital.
Example 2 – amounts derived from foreign income and gains
Following on from the example above, Lucia’s records also show that on 1 November 2019 she gifted £100,000 to her sister Margarita, who used the funds to purchase a holiday home in Cornwall.
Lucia’s records show that the gift was made from the sale proceeds of a villa in Marseille that was paid into her French bank account on 15 October 2019. Lucia bought this property a year earlier using £100,000 of her foreign employment income from 2014-15 and did not make a gain on the sale. Although Margarita is not a relevant person, she is a ‘gift recipient’, and Lucia may at some time in the future enjoy the gift (see RDRM33210). Lucia therefore decides to designate the £100,000 in 2025-26, which derives from her foreign employment income from 2014-15, which she will need to do in her Self Assessment tax return for 2025-26; Margarita cannot designate any of the £100,000 in her own tax return on Lucia’s behalf. Lucia does not have to designate the funds in 2025-26, she could designate them in 2026-27 or 2027-28 providing she has not enjoyed the foreign income, and therefore remitted the £100,000, in a year before she makes the designation.