RDRM74720 - Temporary repatriation facility: Scope of designation: BIR investments: Partial designations and part disposals
Where an individual designates all the foreign income or gains that they have invested, the full amount will beÌýTRF capital. Therefore, any potentially chargeable event will result in the remittance of TRF capital, which would be exempt fromÌýfurther tax charges on remittance 바카라 사이트“ see RDRM73600.Ìý
However, individuals may choose to just designate some of the invested foreign income or gains that comprise their qualifying investment. They may also have several qualifying investments in the company or group and decide just to designate the foreign income or gains comprising one, or a few, of their qualifying investments (see RDRM74730).Ìý
Where an individual decides to designate some, but not all, of their invested foreign income or gains, only the amounts that have been designated will be TRF capital.Ìý
All potentially chargeable events except for part disposals will treat all the foreign income and gains that comprise the qualifying investment as having been remitted. Therefore, where there has been a partial designation, there is no priority ordering requirement because the TRF capital and undesignatedÌýforeign income or gains will all be treated as remitted at the same time, subject to a mitigation step being taken (see RDRM74740Ìýfor further information on mitigation steps and when they may be taken).Ìý
If an individual only designatesÌýsome of the invested income and gains and there is a part disposal of a qualifying investment, the earliest part disposalsÌýareÌýtreated as being comprised of TRF capital to the extent that it is available, until there is no TRF capital remaining. Where there has been a partial designation and the qualifying investment was made from a mixed fund, see RDRM74750.Ìý
ExampleÌý
Devika is UK resident and a former remittance basis user. On 30 May 2023 she invested £800,000 of her foreign income from 2021-22 into a UK company by way of a loan and claimed BIR on the investment. She has no other investments in the company or group.Ìý
In the 2025-26 tax year DevikaÌýdesignates £350,000 of the invested foreign income under the TRF and pays the TRF charge of £42,000 (12% of £350,000).Ìý
On 30 May 2026 Devika receives a partial repayment of the loan to the value of £200,000, which is a part disposal of her investment. As the TRF capital takes priority, all £200,000 will be treated as TRF capital.ÌýDevika will not be required to take a mitigation step and the £200,000 will be treated as remitted on disposal, with no further tax charge on the remittance. The remainder of the investment therefore comprises £150,000 of TRF capital and £450,000 of undesignated foreign income.Ìý
On 30 May 2027 Devika receives another partial repayment of the loan to the value of £200,000. Devika has £150,000 of TRF capital remaining in her investment, so this part disposal is treated as comprising £150,000 of TRF capital and £50,000 of undesignatedÌýforeign income. Devika will not be required to take a mitigation step in respect of the £150,000, which will be treated as remitted on disposal, with no further tax charge on the remittance.Ìý
Devika will need to consider whether to take a mitigation step in relation to the £50,000 in order to prevent this amount from being taxed at the usual tax rates when it is treated as remitted at the end of the grace period.ÌýÌý
Alternatively, if Devika does not want to take a mitigation step or pay tax at the usual rate, she could designate the £50,000 in her 2027-28 tax return, which means sheÌýwould pay the TRF charge of £7,500 (15% of £50,000) on this amount instead.Ìý
Any remaining disposals of Devika바카라 사이트™s investment will be treated as comprisingÌýundesignated foreign income unless she makes any more designations in relation to this qualifying investment before the end of the TRF period.Ìý