Many internationally mobile employees believe that Overseas Workday Relief (OWR) ended on 6 April 2025. Fortunately, that isn’t always the case.
If you moved to the UK before 6 April 2025 and claimed Overseas Workday Relief, you may still be able to continue claiming relief under the transitional rules, even if you do not qualify for the new Foreign Income and Gains (FIG) regime.
In this article, we explain who can still claim OWR, how the transitional rules work and why many taxpayers could be missing out on valuable tax relief.
What is Overseas Workday Relief?
Overseas Workday Relief (OWR) is a UK tax relief designed for internationally mobile employees who perform employment duties both inside and outside the UK.
Broadly, the relief allows the overseas portion of employment income to receive favourable UK tax treatment.
The rules changed significantly from 6 April 2025, but not everyone moved onto the new regime immediately.
How Did Overseas Workday Relief Work Before 6 April 2025?
Before 6 April 2025, OWR formed part of the UK’s non-UK domicile (non-dom) remittance basis rules.
Broadly, you could qualify if you:
- Were UK tax resident;
- Were non-UK domiciled;
- Claimed the remittance basis of taxation; and
- Performed employment duties both in and outside the UK.
Provided the overseas earnings remained outside the UK and were not remitted, they could generally remain outside the scope of UK tax.
The relief was normally available for the first three tax years of UK residence.
What Changed on 6 April 2025?
From 6 April 2025, the non-dom regime was abolished and replaced with the new Foreign Income and Gains (FIG) regime.
Under the new rules, eligibility for Overseas Workday Relief is based on meeting the conditions for the FIG regime, including a requirement to have been non-UK resident for ten consecutive tax years before becoming UK resident.
However, an important exception exists.
If you were already claiming Overseas Workday Relief before the new rules came into force, you may still qualify under the transitional provisions.
Can I Still Claim Overseas Workday Relief?
Possibly.
You may still be entitled to OWR if you:
- Became UK resident before 6 April 2025;
- Were non-UK domiciled under the previous rules;
- Claimed the remittance basis;
- Had already started claiming Overseas Workday Relief; and
- Are still within your original three-year claim period.
Many people incorrectly assume they must now satisfy the ten-year non-UK residence test.
That is not always the case.
Example – Why the Transitional Rules Matter
David is non-UK domiciled.
He worked in Singapore before returning to the UK during the 2024/25 tax year.
Although David had spent most of the previous ten years overseas, he had returned to the UK for one tax year before moving back to Singapore.
As a result, he does not have ten consecutive years of non-UK residence.
If David arrived in the UK today, he would not qualify for Overseas Workday Relief under the new FIG regime because he fails the ten-year residence requirement.
However, David became UK resident before 6 April 2025.
He was non-UK domiciled, claimed the remittance basis, and had already started claiming Overseas Workday Relief under the previous legislation.
Because of the transitional rules, David can continue claiming OWR for the balance of his original three-year entitlement.
Without understanding the transitional legislation, David could easily have assumed that his relief had ended.
Is There a Financial Limit?
One advantage of the transitional rules is that the new annual financial cap does not apply.
This means eligible employees are not subject to the lower of:
- 30% of qualifying employment income; or
- £300,000.
For higher earners, this can result in a significant tax saving.
How Do You Claim Overseas Workday Relief?
Overseas Workday Relief is not automatic.
If you qualify under the transitional rules, you must make the appropriate claim through your UK Self-Assessment tax return.
Before making a claim, it is important to consider whether OWR is actually the most beneficial option.
Depending on your circumstances, claiming OWR may result in the loss of valuable UK tax reliefs, including your:
- Personal Allowance;
- Marriage Allowance;
- Blind Person’s Allowance;
- Married Couple’s Allowance; and
- Capital Gains Tax Annual Exempt Amount.
Where overseas earnings have already suffered foreign tax, claiming Double Tax Relief instead may sometimes produce a better overall tax result.
How FKGB Accounting Can Help
The rules surrounding Overseas Workday Relief changed significantly from 6 April 2025, but many employees who arrived in the UK before that date may still qualify under the transitional legislation.
At FKGB Accounting, we specialise in advising internationally mobile individuals moving to and from the UK.
We can review your UK residence history, confirm whether you qualify for Overseas Workday Relief under the transitional rules, calculate your available relief and prepare your UK Self-Assessment tax return.
If you are unsure whether you can still claim OWR, contact us for professional advice before submitting your tax return.
Please get in toucheither by email shimshon.goodman@fkgb.co.uk or book a zoom meeting on my calendar – https://calendly.com/shimshon-goodman-fkgb/30min.
