RDRM76300 - Temporary repatriation facility: Interaction with other rules and regimes: Nominated income and gains
Source: gov.uk (2025-04-07)


Overview (#Overview)

Individuals already subject to the nominated income ordering rules (#Individuals already subject to the nominated income ordering rules)

Individuals remitting nominated income and gains on or after 6 April 2025 (#Individuals remitting nominated income and gains on or after 6 April 2025)

Overview

Paragraph 14 Schedule 10 Finance Act 2025

Former remittance basis users who paid the remittance basis charge may have amounts of ‘nominated income and gains’ offshore – see RDRM32310 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32310). These are amounts of foreign income and gains on which the individual paid the tax which constituted their remittance basis charge for that year.

For these individuals, a remittance of nominated income and gains (above the £10 allowance), before remitting other foreign income and gains, will mean that the specific ordering rules at sections 809I and 809J ITA 2007 will start to apply from the first tax year in which the individual remits any of their nominated income or gains, and continue to apply in each subsequent tax year – see RDRM35120 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35120).

During the temporary repatriation facility (TRF) period it will be possible for individuals to remit amounts of nominated income and gains to the UK without engaging the nominated income ordering rules at sections 809I and 809J and without paying any further tax. This is a temporary measure for the TRF period, so any remittances of nominated income and gains on or after 6 April 2028 will engage the ordering rules.

Individuals will only be able to benefit from the temporary disapplication of the nominated income ordering rules in sections 809I and 809J if they:
- make a designation election in the year they remit the nominated income and gains, or have made a designation in an earlier year
- are not already subject to the nominated income ordering rules (because they have remitted nominated income or gains in a tax year prior to 2025-26)
It will not be necessary for an individual to designate an amount of nominated income and gains itself in order to remit it during the TRF period, because tax has already been paid on the amount.

Individuals already subject to the nominated income ordering rules

If an individual has already remitted amounts of nominated income and gains in a tax year prior to 2025-26 and has engaged the nominated income ordering rules, the ordering rules will continue to apply for the TRF period and after it ends, in the same way that they applied before the TRF period started.

However, this will not prevent individuals being able to designate amounts of pre-6 April 2025 foreign income and gains under the TRF. Any amounts of designated qualifying overseas capital do not form part of an individual’s ‘remittance basis income and gains’ for the purposes of sections 809I and 809J, so designated qualifying capital can be remitted in priority to remittance basis income and gains.

Example 1

Roman is UK resident and a former remittance basis user. He has been UK resident in every tax year since his arrival in the UK on 6 April 2016, so was required to pay the remittance basis charge for 2023-24. On 6 April 2024 he had 3 overseas bank accounts that contained all of his foreign income and gains for the 2023-24 tax year:
- account A contains £66,667 of relevant foreign income from 2023-24
- account B contains £145,000 of relevant foreign earnings from 2023-24
- account C contains proceeds from an asset sale in 2023-24, which includes £120,000 foreign gain
Roman nominated the £66,667 of relevant foreign income in account A to create the remittance basis charge.

On 1 June 2024 Roman remits £60,000 of relevant foreign income from account A. This is a remittance of nominated income. However, he has other foreign income and gains from 2023-24 that have not yet been remitted, so the ordering rules at section 809J apply.

Under the ordering rules Roman is regarded, and taxed, as if he had remitted £60,000 of his relevant foreign earnings from account B, even though he has not actually done so.

On 1 August 2025 Roman remits £50,000 of his foreign chargeable gains from account C. This is his only remittance in 2025-26. Because the nominated income ordering rules continue to apply to his remittance basis income and gains throughout the TRF period, this will be regarded, and taxed, as if he had remitted a further £50,000 of his relevant foreign earnings from account B.

However, Roman could designate the £50,000 from account C in his Self Assessment tax return for 2025-26. Therefore, the £50,000 will be designated qualifying overseas capital from 6 April 2025, so the rules at section 809J will not treat that amount as relevant foreign earnings from account B, because he has not remitted any remittance basis income and gains in 2025-26. It is a remittance of designated qualifying overseas capital, which is not within the definition of remittance basis income and gains. To note – account C is a mixed fund, so the £50,000 remitted will be deemed to be designated qualifying overseas capital rather than anything else in the fund as it takes priority in the ordinary mixed fund ordering rules – see RDRM75100 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm75100) onwards.

Roman may decide to designate all of his pre-6 April 2025 foreign income and gains under the TRF from all years in which he was subject to the remittance basis. That way, there will be no further need for him to consider the nominated income ordering rules because he will have no remittance basis income and gains left. It will all be designated qualifying overseas capital.

Individuals remitting nominated income and gains on or after 6 April 2025

Individuals who are not subject to the nominated income ordering rules on 6 April 2025 may remit their nominated income and gains without any further tax charge, providing they make a designation election in that tax year, or have made a designation in a previous year.

If no designation has been made for the year of remittance or any previous year, the nominated income ordering rules at sections 809I and 809J are not prevented from engaging on a remittance of nominated income and gains during the TRF period.

It will not be necessary for an individual to designate an amount of nominated income and gains itself in order to remit it during the TRF period, because tax has already been paid on the amount. If a designation is made on an amount of nominated income and gains in error, this amount will be treated as designated qualifying overseas capital, so that if it is remitted on or after 6 April 2028 the nominated income ordering rules would not engage on the remittance.

When the temporary disapplication of the ordering rules ends with the TRF, the rules will not re-engage in the 2028-29 year for anyone who remitted nominated income and gains during the TRF period. The rules will only engage if an individual remits any amounts of nominated income and gains on or after 6 April 2028. Therefore, individuals may want to take the opportunity to remit all of their nominated income and gains during the TRF period.

Example 2

Portia is UK resident and a former remittance basis user. She has been UK resident in every tax year since her arrival in the UK on 6 April 2012. Portia has paid the remittance basis charge for every tax year since 2019-20.

On 6 April 2025 Portia had 3 overseas bank accounts:
- account A contains £466,668 which is all nominated income
- account B contains £4m relevant foreign income
- account C contains £900,000 foreign gains
On 30 July 2025 Portia remits £400,000 from account A. This is a remittance of nominated income. Because she has other foreign income and gains that have not yet been remitted, the ordering rules at section 809J would apply. However, in her Self Assessment tax return for 2025-26 Portia designates £200,000 of her relevant foreign income from account B and pays the TRF charge of £24,000 (12% of £200,000). As Portia has made a designation election for 2025-26 the nominated income ordering rules are not engaged and no tax is due on the £400,000 remittance in 2025-26.

As Portia has made a designation election in 2025-26, she is free to remit the remaining nominated income in account A during either the 2026-27 or 2027-28 tax years. Portia chooses not to remit the remaining funds in account A and doesn’t make any further designations before the end of the TRF.

On 24 May 2028 Portia remits £500,000 from account C. Even though Portia remitted nominated income in 2025-26, and the temporary disapplication of sections 809I and 809J has ended, the nominated income ordering rules are not engaged on this remittance. Account C only contains foreign gains, so it is £500,000 of these gains that are remitted on 24 May 2028.

On 30 November 2029 Portia remits the remaining £66,668 from account A. This is a remittance of nominated income. Because she has other foreign income and gains that have not yet been remitted, the ordering rules at section 809J will now apply for this and subsequent years. It does not matter that the ordering rules were disapplied for Portia during the TRF period, because this is a remittance of nominated income after 6 April 2028.