The Remittance Basis and Its Aftermath
Written and reviewed by the Non-Dom Accountants editorial team. Last reviewed 28 July 2026.
The remittance basis let non-domiciled residents keep foreign income and gains outside UK tax until the money was brought, or remitted, to the UK. It was abolished on 6 April 2025, but the accounts it created did not disappear with it.
This guide explains how the basis worked, why mixed funds are still a live problem, and why the cleansing window has closed. Where older wealth needs to come onshore, the Temporary Repatriation Facility is now the main route, and the ordering of accounts is part of our remittance and TRF planning.
How the Remittance Basis Worked
A non-domiciled resident who claimed the remittance basis was taxed on UK income and gains as normal, but foreign income and gains were taxed only if and when they were remitted to the UK. Money kept offshore could grow untaxed here for as long as it stayed offshore.
A remittance was widely defined. Bringing cash here, spending on a UK credit card from a foreign account, or buying a UK asset with offshore funds could all trigger a charge.
What a Remittance Actually Was
The rules looked through to the underlying money, not just the transfer. Using foreign income to service a UK loan, or bringing an asset bought with untaxed income into the country, counted as a remittance. This is why record-keeping mattered so much under the old regime.
The reform ended the basis going forward, but a remittance of pre-2025 income made today can still be taxable unless it has been designated under the transitional facility.
The Mixed-Fund Problem
Many offshore accounts mixed several kinds of money, such as clean capital, foreign income and foreign gains, in a single balance. When money was remitted from a mixed fund, strict ordering rules decided which layer was treated as remitted first, usually the most highly taxed. HMRC set the ordering out in their remittance basis manual.
Because those rules pull the worst layer out first, a careless transfer from a mixed account can produce a far larger charge than the amount actually needed.
The Cleansing Window Has Closed
Between 6 April 2017 and 5 April 2019 there was a temporary window to separate mixed funds into their component parts, so that clean capital could later be brought onshore tax free. That window has ended, and it has not been reopened.
There is no new cleansing facility. Where accounts remain mixed, the ordering rules apply in full, and the practical answer is to designate the taxable layers under the transitional facility rather than to try to unpick the account.
What the Legacy Means Now
The background to the change is set out in the government paper on reforming the taxation of non-UK domiciled individuals. The regime is closed, but the offshore balances it produced are still on the books.
The task now is to identify what each account contains and to bring money onshore in the order that produces the smallest charge, using the transitional rate while it lasts.