# Finance Act 2025, Paragraph 17: Mixed funds: TRF capital account

Extent: E+W+S+N.I.

After section 809R of ITA 2007 insert—
“Transfers into TRF capital account
809RZA (1) Subsection (2) applies to a transfer made from a mixed fund if—
(a) it is made from a mixed fund that contains TRF capital,
(b) the transfer is to a TRF capital account, and
(c) the amount of the transfer does not exceed the amount of TRF capital in the mixed fund at the time of the transfer.
(2) The transfer is to be treated as a transfer of TRF capital.
(3) Where subsection (2) would apply to a transfer but does not because of paragraph (c) of subsection (1)—
(a) that transfer is to be treated as two separate transfers occurring one immediately after the other, and
(b) the first of those transfers is to be treated as being in the amount of TRF capital in the mixed fund (and accordingly subsection (2) will apply to that deemed transfer but not the second, which may result in the TRF capital account ceasing to be a TRF capital account).
(4) Section 809RZB makes provision about the nomination of an account as a TRF capital account (and see sections 809RZC and 809RZD for the effect of making a transfer that contains amounts that are not TRF capital).
TRF capital account
809RZB (1) An individual may by notice to the Commissioners nominate an account to be a TRF capital account (and more than one nomination may have effect at any time).
(2) The notice must specify the qualifying date for the account.
(3) “The qualifying date” for the account is the first date on which there is paid into the account sums falling within subsection (4) which (in total) are more than £10 at a time when the credit balance of the account was £10 or less.
(4) A sum falls within this subsection if it is TRF capital.
(5) The individual may withdraw the nomination by giving a further notice to the Commissioners, specifying the date with effect from which the nomination is withdrawn.
(6) A notice under subsection (1) or (5) must be in writing and include such information as the Commissioners may reasonably require.
(7) A notice under subsection (1) or (5) must be given no later than—
(a) 31 January in the tax year following the tax year in which falls, as the case may be—
(i) the qualifying date for the account, or
(ii) the date with effect from which the nomination is withdrawn, or
(b) such later date as the Commissioners may allow.
(8) If an individual nominates an account under this section, the account is a “TRF capital account” of the individual throughout the period—
(a) beginning with the qualifying date, and
(b) ending with the date before the earliest of the following dates—
(i) the date on which the account is closed or ceases to be an ordinary bank account held by and for the benefit of the individual (alone or jointly with others);
(ii) the date with effect from which the nomination is withdrawn under this section;
(iii) 6 April in a tax year in which there is a breach of the TRF deposit rule which is not remedied or cannot be remedied.
(9) The account is not to be a TRF capital account at all if—
(a) at any time on the qualifying date, the account is not an ordinary bank account held by and for the benefit of the individual (alone or jointly with others), or
(b) immediately before the qualifying date, the account has a credit balance of more than £10.
(10) Where the account has a credit balance immediately before the qualifying date (which must be £10 or less), that balance is to be treated as TRF capital for the purposes of this Chapter.
(11) Where interest is payable on TRF capital held in the TRF capital account, any such interest paid into the account is to be treated as TRF capital for the purposes of this Chapter.
(12) The account is not to be a TRF capital account at all if the qualifying date falls in a tax year in which there is a breach of the TRF deposit rule which is not remedied or cannot be remedied.
(13) Subsection (8)(b)(iii) or (12) (as relevant) is to be ignored if the breach occurs on or after a date falling within subsection (8)(b)(i) or (ii).
(14) For the purposes of this section an account is an “ordinary bank account” if it is a cash account in a bank (whether a current or savings account) where sums standing to the credit of the account from time to time represent a debt owed by the bank to the account-holder.
(15) In this section, and in sections 809RZC and 809RZD, a reference to anything “paid into” an account includes anything credited to the account by whatever means.
Breaches of the TRF deposit rule
809RZC (1) There is a breach of the TRF deposit rule if one or more prohibited sums are paid into a TRF capital account on the qualifying date or any day after the qualifying date.
(2) A breach of the TRF deposit rule is remedied if, within 30 days beginning with the day on which the prohibited sums are paid into the account, the required amount is transferred out of the account by way of a single one-off qualifying transfer.
(3) A transfer is “qualifying” if it does not result in the remittance of any amount to the United Kingdom.
(4) “The required amount” is an amount equal to the total of the prohibited sums paid into the TRF capital account on the day of the breach.
(5) If there are 2 days in a tax year on which one or more breaches of the TRF deposit rule occur, subsection (2) does not apply to any breach on any subsequent day in the tax year (and accordingly any breach occurring on any day after the second day in the tax year on which there has been a breach cannot be remedied).
(6) A “prohibited sum” is anything other than a sum that is TRF capital.
Effect where 30-day deadline is met
809RZD (1) This section applies if the required amount in relation to a breach of the TRF deposit rule was transferred out of the account in accordance with section 809RZC(2).
(2) Sections 809Q and 809R have effect as if—
(a) the intervening transactions had never taken place, and
(b) each prohibited sum represented by the required amount had instead been transferred directly (at the time that sum was paid into the TRF capital account) into the account or other property into which the required amount was transferred by virtue of the single one-off qualifying transfer.
(3) Each of the following is an “intervening transaction”—
(a) each payment into the TRF capital account of a prohibited sum represented by the required amount, and
(b) the single one-off qualifying transfer out of the TRF capital account.”

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Source: https://www.legislation.gov.uk/ukpga/2025/8/schedule/10/paragraph/17 (the official version)
Page: https://openlegislation.uk/finance-act-2025/schedule-10/paragraph-17
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.