Guidance

HS262 Income and benefits from transfers of assets abroad and income from Non-Resident Trusts (2026)

Updated 6 April 2026

If you need to use Making Tax Digital for Income Tax, you should read this helpsheet together with the guidance on how to use Making Tax Digital for Income Tax.

You will use compatible software to create digital records and send quarterly updates for your self-employment and property income sources. After this, you will make claims and adjustments through the software, instead of the Self Assessment boxes referenced as follows.

This helpsheet gives you information to decide whether:

• you should report income of a person abroad as your income
• you should report benefits received out of income, or assets of a person abroad, as your income
• any of the amounts you report are exempt from tax
• you should report income payments from a foreign trust

Transfers of assets — power to enjoy income

If you’ve transferred or taken any part in the transfer of assets, or there’s been an operation associated with a transfer and as a result of any of these relevant transactions, income has become payable to a person abroad, you should report the income if the following conditions are met:

• you are resident in the UK for the tax year in which income becomes payable to the person abroad
• you have power (in whatever form) in the tax year to enjoy that income now or at any other time
• if that income were yours and received by you, it would be liable to Income Tax

Transfers of assets — entitlement to capital sums

If you’ve transferred or taken any part in the transfer of assets, or there’s been an operation associated with a transfer and as a result of any of these relevant transactions, income has become payable to a person abroad, you should report the income if the following conditions are met:

• you are resident in the UK for the tax year in which income becomes payable to the person abroad
• you (or another person at your direction or on your assignment) have received this year or in the past, or are entitled to receive, a capital sum (including, for example, a loan) connected in any way with a relevant transaction

Income

The amount of income from relevant transactions of the person abroad in the tax year.

This includes all forms of income, as well as certain items treated as income. Examples of items treated as income are:

• offshore income gains — read the Offshore Funds Manual
• chargeable event gains on certain insurance policies — read Helpsheet 321 Gains on foreign life insurance policies
• savings and investments, as explained in the Savings and Investment Manual

Reporting income

You will need to report income using the ‘Foreign’ pages’ form.

You will either need to complete box 46 on page F7, or report the amount of income on page F3 as follows:

• box 11 — enter details of all dividends received on which you are chargeable, including any allowable foreign tax credit
• box 13 — all other income, including any tax paid on that income

In box 19 (‘Any other information’) on page TR7 of your tax return, enter the details of:

• relevant transactions which gave rise to the income
• the offshore structures involved

Enter all income that is chargeable to tax under the transfer of assets provisions in boxes 11 and 13, not in the corresponding boxes for the type of income involved. For example, if interest income arose to a foreign company and that income is treated as yours under the transfer of assets provisions, you should enter the income at box 13, not in the relevant boxes for interest.

If you are a qualifying new resident and meet the conditions for the foreign income and gains (FIG) regime you should enter in box 11.1 the amount of dividend income received by the person abroad that qualifies for the FIG regime. From the total in box 11, enter the amount that you are claiming under the FIG regime, this will typically be the foreign dividend income received by the person abroad. You should use box 13.0 to quantify the amount that you are claiming under the FIG regime for all other income received by the person abroad. From the total in box 13 enter in box 13.0 the amount that you are claiming under the FIG regime.

If you are making a claim under the FIG regime you will need to complete boxes 23 to 30 of the SA109 Residence and foreign income and gains (FIG) regime etc.

If the remittance basis applied to you in an earlier year, you need to report any ring-fenced amounts that were remitted to the UK this year. This is in addition to reporting any amounts arising to you this year.

Enter in box 13 any ring-fenced amounts (whether income or benefits) that were remitted to the UK this year, alongside any income arising this year. Complete columns B and C as appropriate. Do not enter amounts for remittances of ring-fenced income in box 11. Remittances of previously ring-fenced amounts are included in box 19 (‘Any other information’) on page TR7 of your tax return.

These provisions only apply to foreign income arising on or after 6 April 2008.

You should not include in box 13 any ring-fenced foreign income that you have designated as qualifying overseas capital under the Temporary Repatriation Facility. Any designated amount should be reported at boxes 50 to 53 of the SA109 Residence and foreign income and gains (FIG) regime etc.

If you’re unsure about what amount to report, either:

• ask your tax adviser
• report the full details, including amounts and your doubts, in box 19 (‘Any other information’) on page TR7 of your tax return

If you’re the settlor of a non-resident trust that was covered by the trust protection measures, read the following section on ‘Trust Protections and Protected Foreign-Source Income’.

Transfers of assets — benefits received as a result of a relevant transaction

An individual may be chargeable on a benefit received as a result of relevant transactions if they:

• receive a benefit from a relevant transaction made by another individual
• are a settlor of a non-resident trust where the benefit is matched with transitionally protected income or protected foreign-source income, and they, or in certain circumstances a close family member, receive a benefit from the trust or its underlying entities
• are chargeable on a benefit under the onward gifts rules

Benefits received as a result of relevant transactions made by another individual

If you receive a benefit from a relevant transaction made by another individual, and the following conditions are met, the value of the benefit (including payment) can be treated as your income for tax purposes.

The conditions are:

• you are resident in the UK for the tax year in which you receive the benefit
• you are not liable to Income Tax for the relevant transaction under either of the provisions mentioned previously
• you are not otherwise liable to Income Tax on the benefit, apart from this provision
• the person abroad has ‘available relevant income’ up to the amount of the ‘total untaxed benefits’

Relevant income if you have received benefits

Follow these steps to calculate the amount that you should report in the tax return.

1. Identify the total benefits — this is the amount or value of benefits received in the tax year and any earlier tax year in which there were taxable benefits.
2. Deduct the total untaxed benefits from the total benefits — this is the total amount treated as your income under these provisions for earlier tax years as a result of the relevant transactions.
3. Identify the relevant income of the tax year — this is the amount of income arising to the person abroad in the tax year which can, as a result of relevant transactions, be used directly or indirectly to provide a benefit.
4. Add together the relevant income of the tax year and the relevant income of earlier tax years to find the total relevant income. Ignore any income that arose before 10 March 1981.
5. Deduct from the total relevant income the amount deducted at Step 2 and any other amount not to be taken into account (for example, because of provisions for no duplication of charges). The result is the available relevant income.
6. Enter the available relevant income on your return if it is lower than the total untaxed benefits. Otherwise, enter the total untaxed benefits.

If you received your payment or other ‘benefit’ from a UK resident trust which either has been a non-resident trust, or which has received assets from a trust which either is or has been a non-resident trust, only count income that arose while the relevant trust was abroad. If you’re unsure whether the trust is or has been a non-resident trust you should ask the trustees or your tax adviser.

Benefits include, for example, loans at less than a commercial rate of interest and the occupation or use of property at less than a commercial rental. The value of the benefit will be determined from the circumstances of the case but may be the difference between the amount payable at the commercial rate of interest or rental and any amount actually paid by you.

You must also include indirect receipt of benefits, for example, if the benefit came from a company controlled by trustees, or from a UK resident trust that has been, or has received funds from, a non-resident trust.

You may need to ask the person abroad for information to complete your return.

If the value of what you received or benefitted from is greater than the available relevant income, you may be liable to Capital Gains Tax on the excess. Read Helpsheet 301: Beneficiaries receiving capital payments from non-resident trust and the ‘Capital gains summary’ pages.

Reporting benefits as a result of a relevant transaction made by another individual

Enter the amount from step 6 in box 58 of the ‘Foreign’ pages, unless you are completing box 46.

Enter in box 19 (‘Any other information’) on page TR7 of your tax return:

• the full name and address of the person abroad receiving the available relevant income
• the details of the relevant transactions that have given rise to the income
• how you have calculated the benefits included on the return

If the benefit has come from a UK resident trust, give details of these circumstances, including the full name of any other trust involved. Read the section ‘Relevant income if you have received benefits’ for more information.

If you are a qualifying new resident and meet the conditions for the foreign income and gains (FIG) regime you should enter in box 58.1 the benefit received from the person abroad that qualifies for the FIG regime. From the total in box 58 enter the amount that you are claiming under the FIG regime in box 58.1. This will typically be the amount of the benefit you received that is matched with foreign income of the person abroad.

If the remittance basis applied to you in an earlier year, you need to report any benefits that you received in an earlier year that were remitted to the UK this year.

You do not need to report here any amounts you have designated under the temporary repatriation facility which would ordinarily be reported under the benefits charge. Any designated amount should be reported at boxes 50 to 53 of the SA109 Residence and foreign income and gains (FIG) regime etc. Read the following sections for information on benefits chargeable on a settlor of a non-resident trust.

Trust protections and protected foreign-source income

From 6 April 2017 to 5 April 2025, non-resident trusts settled by non-UK domiciled individuals, or by individuals who were treated as deemed domiciled in the UK because they had been resident in the UK for at least 15 of the previous 20 tax years before they became deemed domiciled, were subject to special rules. The rules also applied to the underlying companies of these trusts.

Under these rules, the settlor of such a trust would only be subject to a charge on the income arising to the person abroad if it was UK source income. The remainder of the income that arose to the trust or its underlying entities during the period 6 April 2017 to 5 April 2025 was protected foreign-source income and the settlor was chargeable on benefits they received from the trust or its underlying entities to the extent it was matched to the protected foreign-source income or transitionally protected income. Transitionally protected income is foreign income of the trust that arose before 6 April 2017 that had not been chargeable under the ToAA provisions because it had not been remitted to the UK by that date.

These rules no longer apply and from 6 April 2025 a settlor will be assessable on the income of the trust and its underlying entities as it arises provided the conditions for charge referred to above apply. A settlor will continue to be taxable on any benefits that they receive, but only to the extent that the benefits can be matched with transitionally protected income or protected foreign-source income.

Benefits received by close family members 

The transfer of assets benefits charge applies to settlors of certain non-resident trusts where a benefit is provided to a person who is a close family member of the settlor. This applies where the close family member was either:

• not resident in the UK in the tax year they received the benefit
• a UK resident who is a qualifying new resident for the tax year in which the benefit is provided and makes a claim for the FIG regime to apply

A close family member is:

• a spouse or civil partner of the settlor (if two people are living together as if they were spouses or civil partners of each other they will be treated as if they are spouses or civil partners)
• a child of the settlor or a child of the spouse or civil partner if the child has not reached 18

A settlor will be chargeable on a benefit provided to a close family member if the following conditions are met:

• they are resident in the UK at some time in the tax year
• at no time in the tax year were the trustees of the settlement resident in the UK
• a benefit is received by a close family member of the settlor and the benefit can be matched with an amount of protected foreign-source income or transitionally protected income in relation to the relevant transfer

The effect of the charge is to assess the settlor on the benefit received by the close family member. If you are assessable on a benefit received by a close family member you are entitled to recover the amount of tax paid from the close family member concerned by obtaining a certificate from HMRC.

Recipients of onward gifts

Distributions that are received from an offshore trust by an individual who is not taxable in the UK, are attributed to a UK resident who receives an onward gift from them. This provision only applies if there is an arrangement in place, or it is intended when the distribution was made to pass it in whole or part to another person. The effect of the charge is to assess the UK resident as though they have directly received the benefit from the offshore trust. If only a part gift is made, the total that can be taxed is restricted to the amount received.

The original beneficiary must either:

• not be resident in the UK in the tax year
• be a resident in the UK who is a qualifying new resident in the tax year in which the benefit is provided and make a claim for the FIG regime to apply and makes the gift to the recipient within 3 years of the distribution

The recipient must be UK resident in the tax year they receive the gift.

A settlor may also be chargeable if they or a close family member are gift recipients. In these circumstances, if the settlor is liable to tax, they can recover the amount from the recipient by obtaining a certificate from HMRC.

Transitionally protected income and protected foreign-source income chargeable

When a settlor is chargeable on a benefit they or a close family member have received, the amount of income to be subject to tax is calculated using the following steps:

1. The total benefits: identify the amount or value of such benefits received by the individual in the tax year and in any earlier tax year in which the benefits charge could or has applied. Include all benefits the settlor or close family member received in a tax year when the benefits charge applied. Also include benefits they received in a tax year when there would have been a benefits charge if there was enough transitionally protected income or protected foreign-source income to match against the benefits received. Do not include benefits provided to a transferor before 6 April 2017.
2. The total untaxed benefits: deduct the amount of income which arose to the individual under the benefits charge through the relevant transfer or associated operations from the total benefits.
3. The total relevant income: identify the amount of transitionally protected income and protected foreign-source income which has arisen to a person abroad, and as a result of the relevant transfer or associated operations can be used directly or indirectly for providing a benefit for the individual.
4. The available relevant income: deduct the amount at step 2, and any other amount affected by the no duplication of charges provisions, from the total relevant income.
5. The income treated as arising: compare the total untaxed benefits (step 2) and the available relevant income (step 4). The amount of income treated as arising for the purpose of the benefits charge for any tax year is the lower of these two figures.

Reporting protected foreign income

Enter details of benefits received by a transferor in the year from a person abroad matched to transitionally protected income or protected foreign-source income chargeable on a transferor in SA106 box 59, unless you are completing box 46. You should not include in box 59 any benefits that you have designated under the Temporary Repatriation Facility. Any designated amounts should be reported at boxes 50 to 53 of the SA109 Residence and foreign income and gains (FIG) regime etc.

If you are a qualifying new resident and meet the conditions for the foreign income and gains (FIG) regime you should enter in box 59.1 the amount of benefit received from a person abroad that qualifies for the FIG regime. From the total in box 59 enter the amount that you are claiming under the FIG regime in box 59.1.

Enter details of the benefits chargeable on you under the ‘Close Family Member’ rules in SA106 box 60, unless you are completing box 46. You should not include in box 60 any benefits that you have designated under the Temporary Repatriation Facility. Any designated amounts should be reported at boxes 50 to 53 of the SA109 Residence and foreign income and gains (FIG) regime etc.

If you are a qualifying new resident and meet the conditions for the foreign income and gains (FIG) regime you should enter in box 60.1 the amount of benefit chargeable on you that qualifies for the FIG regime. From the total in box 60 enter the amount that you are claiming under the FIG regime in box 60.1.

Enter details of any benefits chargeable on you under the Onward Gift rules in SA106 box 61 unless you are completing box 46.

If you are a qualifying new resident and meet the conditions for the foreign income and gains (FIG) regime you should enter in box 61.1 the amount of benefit chargeable on you that qualifies for the FIG regime. From the total in box 61 enter the amount that you are claiming under the FIG regime in box 61.1

For more details on reporting benefits arising to transferors read the International Manual at INTM603695 onwards.

Relevant transaction

A relevant transaction is a relevant transfer or associated operation. A transfer is relevant if it is a transfer of assets and income becomes payable to a person abroad as a result of either:

• the transfer
• an operation associated with the transfer

In this connection:

• ‘assets’ means tangible assets (for example, cash, property or shares) or intangible assets (for example, rights, such as rights to your services)

• ‘associated operation’ means an operation of any kind, effected by any person, in relation to:

  (i) any of the assets transferred

  (ii) any assets directly or indirectly representing any of the assets transferred

  (iii) the income from any assets in (i) or (ii)

  (iv) any assets directly or indirectly representing the accumulations of income from any assets in (i) or (ii)

Person abroad

For these provisions, a ‘person abroad’ means a person who is resident outside the UK. That person could, for example, be an individual, a body of trustees, or a company. Persons treated as resident outside the UK include:

• trustees of certain settlements regarded as non-UK resident
• certain personal representatives of a deceased person who are treated as non-UK resident

Spouse or civil partner involvement

You may still have to report income under this section even if:

• you did not make the relevant transactions
• you cannot enjoy the income of the person abroad
• you are not entitled to receive any capital sum connected to the transfer

This may be the case if your spouse or civil partner made the relevant transactions, can enjoy such income or is entitled to receive such a capital sum.

Tax paid on the income

The following paragraph only applies if you are reporting income.

You may be able to claim a deduction against your liability for tax credits or other tax paid on the income of the person abroad. You can do this if the amounts you enter in boxes 11 and 13 of the ‘Foreign’ pages include any such taxes. You can only claim relief for tax paid by the person abroad:

• if it is tax on ‘the same’ income
• to the extent that the tax was paid by, and not refunded to, the person abroad

You should include the amount of tax for which you can claim relief:

• in column C on page F2 of the ‘Foreign’ pages
• in box 2 of the ‘Foreign’ pages

You should note Column E on page F3 of your claim.

You should also send a schedule with the ‘Foreign’ pages. The schedule should show:

• the amount of each item of income you included in boxes 11 and 13, and column C
• tax credit and tax paid on the income you included in boxes 11 and 13, and column C

If you are claiming relief for foreign tax, and you want to claim Foreign Tax Credit Relief (FTCR) (read page FN3 of the ‘Foreign’ notes), enter the following on the schedule:

Column A — Country or territory code

Column B — Amount of income arising or received before any tax is taken off

Column C — Foreign tax taken off or paid

Column E — That you wish to claim FTCR and the rate of tax allowed (read page FN3 of the ‘Foreign’ notes)

Column F — Amount included in boxes 11 and 13, which should be the amount arising before any tax is taken off

If you do not want to claim FCTR for foreign tax, do not make an entry in Column E. The amount you include in boxes 11 and 13 should be the income after foreign tax.

If you are claiming a deduction for UK Corporation Tax, you should also enter the following in box 19 (‘Any other information’) on page TR7 of your tax return:

• the full details of how you calculated the amount of credit claimed
• the name, address and, where appropriate, the tax reference number of the person or company which paid the tax

You can use an estimate of the amount of credit available if you do not know the final amount of tax paid by the person abroad. If you do this, you must:

• explain in box 19 of your tax return why you used an estimate
• amend your tax return when you know the final details

You may be liable for interest on tax paid late if any additional tax becomes payable after you amend your return.

Income from a trust

You should read and download the ‘Trusts etc’ pages and Helpsheet 270: Trusts and settlements — income treated as the settlor’s income if:

• income has become payable to a trust abroad, due to a transfer of assets
• you have received, or are deemed to have received, income from the trust

These resources will help you to consider if you should report the income of the trust under this heading or elsewhere on your tax return.

Qualifying for an exemption from charge on income or benefits

Income or benefits may not be charged under these provisions if you can show that either:

• the relevant transactions were not made to avoid paying UK tax
• all the relevant transactions were genuine commercial transactions that were no more than incidentally designed for the purpose of avoiding a liability to tax

If you omit income from boxes 11, 13, 58, 59,60 or 61 of the ‘Foreign’ pages for either of these reasons, you must:

• enter the total amount omitted in box 46
• give relevant details and an explanation for the omission in box 19 on page TR7 of your tax return

In your explanation, include details of:

• details of assets transferred and any associated operations
• the persons abroad
• the circumstances of the relevant transactions
• the basis for your claim to exclusion

If you cannot calculate an exact figure, you can use an estimate in box 46. You should explain this in box 19 (‘Any other information’) on page TR7 of your tax return. If HMRC are not satisfied that you are due an exemption, you will need to provide exact figures for all relevant boxes.

Income from non-resident trusts

If you have an absolute entitlement to the income from a non-UK resident trust, enter the foreign-source income in boxes 4 to 9 on page F3 of the ‘Foreign’ pages according to the nature of the income. Enter UK source income in boxes 3 to 5 on page T1 of the ‘Trusts etc’ pages (or as directed in the notes for those boxes on page TN2 of the ‘Trusts etc’ notes).

If you’ve received a discretionary payment from the non-UK resident trust, enter all of the income in box 54 on page F7 of the ‘Foreign’ pages unless the situation mentioned in the next paragraph applies.

If you want to make a claim under Extra Statutory Concession B18, contact HM Revenue and Customs (HMRC) Trusts.

You should also:

• advise your tax office that you are making a claim under Extra Statutory Concession B18
• enter the name and tax reference of the trust from which the income payment was received in box 19 (‘Any other information’) on page TR7 of your tax return

Read page TN1 of the ‘Trusts etc’ notes if part, or all, of the income distribution was already charged to tax in the UK on the settlor of the trust. You should include the amount so charged in box 2 of the ‘Trusts etc’ pages instead of box 54 of the ‘Foreign’ pages. You do not need to include discretionary payments made to you by the trustees if:

• you are the settlor
• you are already chargeable on the income arising to the trustees

The amount you enter either in box 54 of the ‘Foreign’ pages or in box 2 of the ‘Trusts etc’ pages should take account of the effects of your residence status.

Read the section ‘Trust protections and protected foreign- source income’ if you are the settlor of a trust that was covered by the trust protections.

Contact HMRC

Contact HMRC for advice on Self Assessment and to change your personal details.