By Ogonna Agwa
03 Aug 2026
Last updated: 30.07.2026
Offshore fund segregation still matters after the abolishment of the UK remittance basis because historic foreign income and gains may still trigger a UK tax charge if they are remitted to the UK.
On 6 April 2025, the UK’s remittance basis regime was abolished and replaced with a new residence-based regime for foreign income and gains, often referred to as the FIG regime.
This was a major change for internationally mobile individuals. Under the old rules, non-UK domiciled individuals who claimed the remittance basis were generally taxed on foreign income and gains only if those funds were brought, or “remitted”, to the UK. Under the new rules, domicile is no longer central to the Income Tax and Capital Gains Tax treatment of foreign income and gains.
Although the remittance basis ended on 6 April 2025, historic offshore funds can still carry UK tax consequences and former users of the scheme should understand what their offshore accounts contain before remitting funds to the UK, using the Temporary Repatriation Facility (TRF), or reorganising their investments.
In this article, we explain what the new FIG regime means for pre-6 April 2025 offshore funds, why historic funds still matter, how clean capital can retain its value, and when the TRF may help individuals manage their offshore position more effectively.
The FIG regime can provide relief for qualifying new UK residents. Broadly, eligible individuals who have not been UK tax resident in the previous ten tax years may be able to claim relief on foreign income and gains arising during their first four tax years of UK residence. However, it does not automatically remove the UK tax implications of historic income and gains that arose before 6 April 2025.
An offshore account may contain different types of funds, including clean capital, foreign income, foreign gains, previously taxed amounts, untaxed pre-6 April 2025 income and gains, and investment returns. If those funds have been mixed over several years, it may be difficult to identify what is being brought to the UK and how it should be taxed.
This is particularly important for individuals who used offshore income or gains to build investment portfolios, acquire assets, make transfers between accounts, or fund offshore structures.
Clean capital remains valuable because it can generally be brought to the UK without triggering a tax charge. However, it can lose its practical usefulness if it is mixed with untaxed pre-6 April 2025 income and gains in the same account.
Where funds are mixed, the UK tax rules may determine the order in which amounts are treated as remitted. This is why maintaining clear records and separate accounts can still be important, even after the end of the remittance basis.
The TRF was introduced as part of the transition to the new residence-based regime. It allows certain former remittance basis users to designate qualifying pre-6 April 2025 foreign income and gains and bring them to the UK at a reduced tax rate during a limited period (12% for 2025/26 and 2026/27, rising to 15% for 2027/28).
This may be attractive for individuals who want to simplify their offshore position or bring historic funds to the UK. However, the TRF is not automatic. A formal designation is required, so individuals need a clear understanding of the funds they are designating.
Where accounts are mixed, or the history of funds is unclear, further analysis may be needed before a decision is made.
Former remittance basis users should consider reviewing their offshore accounts and investments to identify the source of funds, whether any pre-6 April 2025 foreign income or gains remain unremitted, and whether the TRF may be useful.
Where records are incomplete, it may still be possible to reconstruct the position using bank statements, investment reports, tax returns and historic advice.
The end of the remittance basis is a major change, but it does not remove the need for careful offshore fund analysis.
If you hold historic offshore funds, understanding your position before making remittances or investment changes could help avoid unexpected tax consequences.
Our International Tax team can help you identify what your accounts contain, assess the UK tax impact, and decide on the most effective next step. Please contact us to arrange an initial discussion.
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