Why This Election Exists at All
Rebasing is a piece of legislative equity. Before 2017, non-UK-domiciled individuals using the remittance basis were taxed on foreign gains only when remitted. They accumulated latent gains inside offshore accounts, investment wrappers, and personally-held foreign property, with the UK fisc having no immediate claim.
The Finance (No. 2) Act 2017 brought a cohort of long-term non-doms within deemed domicile by operation of the 15-of-20 rule. Section 835BA ITA 2007, condition B, captured them. From 6 April 2017 those individuals faced arising-basis taxation of foreign gains on disposal. If the statute had done nothing else, they would have been taxed on gains accumulated across decades of remittance-basis protection. Parliament's answer was Schedule 8 of the 2017 Act, which inserted a rebasing mechanism into TCGA 1992: on disposal, the individual could elect to treat the 5 April 2017 market value as the base cost of an eligible foreign asset. Only gain after that date was taxable.
Finance Act 2025 performed a parallel adjustment for the wider group of former remittance-basis users now pulled onto the arising basis by the full abolition of the remittance regime on 6 April 2025. The mechanism is the same; the eligible population is larger. HMRC guidance at CG25302 covers the legacy deemed-domicile rebasing; the 2025 extension is documented across the Residence and FIG Regime Manual and the updated Capital Gains Manual chapters.
The distinction matters for scope. If the reader's position tracks the 2017 deemed-dom route, legacy CG25302 guidance applies directly. If the reader is a former remittance-basis user who never became deemed domiciled under condition B (for example, fewer than 15 UK tax years before 6 April 2025), the FA 2025 extension is the operative provision. The statutory rebasing date in both cases is 5 April 2017. The eligibility conditions differ at the margin.
Eligibility Under the Finance Act 2025 Extension
To make a rebasing election under the FA 2025 extension, an individual must satisfy four cumulative conditions.
First, the individual was subject to the remittance basis in at least one tax year from 6 April 2017 to 5 April 2025. This is the same "subject to" test that governs TRF eligibility under Paragraph 1 Schedule 10 FA 2025 and includes default remittance basis by operation of s.809D ITA 2007 where unremitted foreign income and gains were under £2,000.
Second, the individual is UK-resident in the tax year of disposal under the Statutory Residence Test. Non-UK-residents are outside UK CGT on foreign assets anyway and the election has no application to them.
Third, the individual is not UK-domiciled under common law on 30 October 2024 or earlier. The transitional provision at IHTM47021 that excludes common-law UK domiciliaries from the long-term resident IHT regime has an analogous effect here. An individual who was UK-domiciled at common law on the announcement date is outside the FA 2025 rebasing extension.
Fourth, the asset in question is an eligible foreign asset. The eligibility envelope is defined at asset level, not at individual level, and is examined next.
Two conditions that do not govern eligibility but that are commonly misread as such:
- There is no requirement that the individual have made a formal remittance-basis claim. Default remittance basis per s.809D qualifies.
- There is no requirement that the individual have paid the remittance basis charge in any prior year. Payment of the RBC is irrelevant to rebasing eligibility.
Eligible Assets
An asset is eligible for rebasing if it satisfies all of the following.
- The asset is located outside the UK on 5 April 2017. UK-situs assets are not within scope; they were taxable on an arising basis regardless of the owner's domicile position.
- The asset was held by the individual personally on 5 April 2017. Assets acquired after that date cannot be rebased to that date; they are acquired at actual cost. Assets held through trusts or companies are not eligible at the personal level; the rebasing rules for trust assets operate under distinct provisions examined in the companion PW4 article on post-April-2025 protected-settlement consequences.
- The asset was not remitted in a chargeable way before 5 April 2017. An asset that has already crystallised a taxable event cannot have that event reversed by a subsequent rebasing election.
- The asset is disposed of on or after 6 April 2025. Pre-2025 disposals were governed by the legacy rules and, where applicable, the 2017 rebasing cohort conditions.
Common asset categories and their treatment:
- Foreign listed securities, shares, investment funds, corporate bonds held personally: eligible.
- Foreign real estate held personally: eligible, provided not UK-situs.
- Foreign currency bank accounts: eligible to the extent that the deposit was held on 5 April 2017. Note that CGT on foreign-currency account withdrawals was abolished for withdrawals on or after 6 April 2012 for most individuals under TCGA 1992 s.252, per RDRM33570. Rebasing interacts with this legacy and the applicable rule depends on the specific currency and deposit pattern.
- Interests in non-resident trusts: outside the scope of this election. See PW4 for the attribution mechanics under s.86 TCGA 1992, s.87 TCGA 1992 matching, and s.731 ITA 2007 benefits.
- Cryptoassets held personally: eligible in principle if the cryptoasset was held on 5 April 2017 and situs is treated as non-UK. HMRC's cryptoasset situs position is evolving; verify against the Cryptoassets Manual before taking a position.
- Interest in a close non-UK company through direct shareholding: eligible at the level of the shareholding, not of the underlying company assets. The shares are the asset being rebased.
Mechanics of the Election
Rebasing is unusual in its procedural form. Three features distinguish it from the routine CGT machinery.
The election is per-asset, on disposal. Unlike TRF designation, which is made prospectively on a tax return, rebasing is made in the year of disposal and in respect of the specific asset being disposed of. An individual disposing of six foreign assets in 2026/27 makes up to six separate rebasing decisions. No "rebase all" election exists.
The election is irrevocable. Once made for an asset, it cannot be withdrawn. If a later event reveals that non-rebased treatment would have produced a better outcome (for example, a downward revaluation of the 5 April 2017 market value on professional valuation), the irrevocability bites.
The election is made in the Self Assessment return for the tax year of disposal, under the foreign pages SA106, in the specific rebasing election box or attached computation, per HS263 and associated HMRC guidance. The valuation at 5 April 2017 must be supportable. HMRC's standard valuation-enquiry window and penalty risk on careless overvaluation both apply.
Record-keeping standard. A rebasing election made in 2026/27 depends on the 5 April 2017 valuation, up to ten calendar years after the valuation date. The evidentiary burden is substantial:
- Contemporaneous professional valuation at 5 April 2017 where available.
- Market data for 5 April 2017 for publicly-traded securities (closing price on the last London trading day before Easter weekend 2017 is a common reference; exchange rate to sterling as at 5 April 2017 is a separate datum).
- Documentary evidence of asset ownership on 5 April 2017.
- Foreign tax paid on the asset between 5 April 2017 and disposal, to compute any double tax relief under HS263.
An individual whose 5 April 2017 valuations are reconstructed from memory in 2027 is not protected by rebasing; they are exposed by it. The valuation discipline is the constraint on the planning benefit.
Interaction With the TRF, FIG Regime, and the LTR IHT Position
The three transitional reliefs sit next to each other. None supersedes another. Each addresses a different tax.
Rebasing addresses Capital Gains Tax on disposal of a specific foreign asset. The relief is a one-time adjustment to base cost.
TRF (Temporary Repatriation Facility per Schedule 10 FA 2025) addresses Income Tax and CGT on remittance of pre-6 April 2025 foreign income and gains. It is a designation-based cleanse at 12% or 15%, independent of which asset the designated amount originated from. See Temporary Repatriation Facility guide.
FIG regime shelters foreign income and gains that accrue to qualifying new residents during their first four years of UK residence. It is the incoming-new-residents counterpart to the outgoing-ex-non-doms reliefs.
The three operate in parallel. A former remittance-basis user disposing of foreign shares in 2026/27 might rebase the shares to 5 April 2017 value, pay CGT on the post-2017 gain at 24%, and in the same year designate £500,000 of unremitted pre-2025 foreign dividend income under the TRF at 12%. The two elections are independent and compounding.
The Long-Term Resident IHT framework operates on a different axis. LTR IHT tail planning deals with worldwide estate exposure on death. Rebasing deals with CGT on lifetime disposals. They do not interact directly, although they share a planning horizon for an individual contemplating departure from the UK.
When Not to Elect
Rebasing is not automatically beneficial. Four scenarios make it destructive or neutral.
The asset has lost value since 5 April 2017. Rebasing to the 5 April 2017 market value when the current value is lower converts what would have been an allowable loss on disposal into a smaller allowable loss, or eliminates it. An asset bought for £100,000 in 2012, worth £400,000 on 5 April 2017, and sold for £250,000 in 2026, produces a £150,000 gain on original cost but a £150,000 loss on rebased cost. The original-cost treatment yields a taxable gain that may be offsettable against other gains; the rebased treatment yields a loss that is smaller and less useful in a portfolio context.
Rebasing is irrevocable; an election made in haste on a falling asset cannot be reversed when the market corrects.
The asset was acquired after 5 April 2017. The election has no effect. An asset acquired on 15 April 2017 was not held on 5 April 2017 and is not eligible. Rebasing is a function of a date; it does not apply to post-2017 acquisitions regardless of how long they have been held.
The asset is inherited from a non-resident spouse after 5 April 2017 at probate value. Inherited assets are typically acquired at market value on death under s.62 TCGA 1992. Rebasing to a date before acquisition is conceptually inapplicable for post-5 April 2017 inherited assets. For assets inherited before 5 April 2017 and held through to disposal, rebasing may apply on ordinary rules.
The asset is disposed of to a spouse on a no-gain-no-loss basis under s.58 TCGA 1992. The disposing spouse's base cost carries over; rebasing at the first disposal (spouse to spouse) produces no immediate benefit and may prejudice the second disposal (spouse to third party) if the base cost adjustment is preserved in a suboptimal form. The analysis for inter-spouse transfers in the context of rebasing is technical and should be resolved before the inter-spouse transfer is executed, not after.
Expected Value: A Framework
A long-held foreign asset held by a former remittance-basis user produces the following CGT outcomes on disposal, at current rates.
Assume: asset acquired 2005 for £100,000; market value on 5 April 2017 £400,000; sale price in 2026/27 £700,000; individual is a higher-rate taxpayer; annual exempt amount already used.
Without rebasing: gain = £700,000 − £100,000 = £600,000. CGT at 24% = £144,000.
With rebasing: gain = £700,000 − £400,000 = £300,000. CGT at 24% = £72,000.
Saving from rebasing: £72,000, or 50% of the without-rebasing CGT charge.
The saving is proportional to pre-2017 appreciation as a share of total gain. Assets with high pre-2017 appreciation benefit most; assets that accumulated most of their gain after 2017 benefit least. The break-even is trivially at zero pre-2017 appreciation; any positive pre-2017 appreciation makes the election economically positive, subject to the "when not to elect" scenarios above.
In practical portfolio work, a rebasing analysis runs across the entire foreign-asset pool of the individual, produces an asset-by-asset projected saving, sequences disposals to optimise against the annual exempt amount and loss offsets, and is integrated with the TRF decision on the income side.
Frequently Asked Questions
Who qualifies for the 5 April 2017 rebasing election under the Finance Act 2025?
An individual who was subject to the remittance basis in at least one tax year from 6 April 2017 to 5 April 2025, who is UK-resident in the tax year of disposal under the Statutory Residence Test, who was not UK-domiciled at common law on 30 October 2024 or earlier, and who disposes of an eligible foreign asset held personally on 5 April 2017. Default remittance basis under s.809D ITA 2007 (unremitted foreign income and gains below £2,000) qualifies. No formal remittance-basis claim or payment of the remittance basis charge is required.
Which foreign assets are eligible for rebasing?
Foreign-situs assets held personally by the individual on 5 April 2017 that have not been remitted in a chargeable way before that date and that are disposed of on or after 6 April 2025. Foreign listed securities, foreign real estate, foreign currency bank account balances, cryptoassets treated as non-UK-situs, and shareholdings in non-resident companies are the principal categories. Assets held through non-resident trusts or foreign companies at the underlying level are outside the personal rebasing election and are governed by separate provisions.
Is the rebasing election all-or-nothing, or can I rebase some assets and not others?
The election is made on a per-asset basis at the time of disposal. Electing to rebase one asset does not commit the taxpayer on any other asset. The portfolio analysis is asset-by-asset. Each rebasing election is irrevocable once made for the relevant asset.
Can I claim the rebasing election and use the Temporary Repatriation Facility in the same year?
Yes. Rebasing operates on the CGT base cost of foreign assets on disposal; the TRF operates on remittance of pre-6 April 2025 foreign income and gains, through a designation mechanism at 12% or 15%. They are independent and can apply to the same individual in the same tax year on different transactions. The two reliefs combined can be materially larger than either used alone, for a former remittance-basis user with both latent gains and undesignated pre-2025 FIG.
Does rebasing help if my foreign asset has lost value since 5 April 2017?
Rarely. Rebasing substitutes the 5 April 2017 market value for the original acquisition cost. If the asset has fallen below the 5 April 2017 value, the rebased base cost is higher than the current proceeds, producing a smaller allowable loss than would arise under original cost. Rebasing is irrevocable; electing on a falling asset typically destroys relief. The default for loss-making assets is to dispose without rebasing.
How do I prove the 5 April 2017 market value if HMRC challenges my election?
Contemporaneous professional valuation is the gold standard. For publicly-traded securities, market data as at 5 April 2017 (the last London trading day before the Easter 2017 weekend) with sterling conversion at the prevailing spot rate is acceptable. For real estate, a RICS-qualified valuer's report dated close to 5 April 2017 or a documented retrospective valuation prepared before disposal. For private company shares, a professional valuation addressing the 5 April 2017 value. HMRC's valuation-enquiry standards and the penalty regime for careless or deliberate over-valuation both apply. An election without supportable valuation evidence is an exposure, not a protection.
Parliament wrote rebasing as equity toward a population whose latent gains would otherwise have been taxed without accrual. The relief is available; the cost of using it badly is that an irrevocable election locks in a sub-optimal base cost for the rest of the asset's life. An individual who rebases on spreadsheet intuition rather than on a valuation file has saved the fee and paid the tax.