United Kingdom · Tax regime
Overseas Workday Relief
Reformed
Last verified
Reformed from 6 April 2025, the relief was extended to 4 tax years and decoupled from domicile and from the requirement to keep income offshore. But for the first time, it is now capped.
For most people, this reform is a genuine improvement. OWR now runs for 4 years instead of 3, applies no matter your domicile, and no longer requires the income to be kept offshore. The old offshore-account choreography and the risk of mixed funds are gone. The trade-off is a hard cap that lands precisely at senior executive pay levels.
The facts
- Total landed cost
- There is no entry cost. Relief is capped at whichever is lower, 30% of qualifying employment income or GBP 300,000 a year.
- Route type
- Tax regime, not a visa
- Physical presence
- Relief tracks actual overseas workdays. The evidence base is a contemporaneous day count along with travel records.
- Family
- Individual employee only
- Permanent residency
- Not applicable
- Citizenship
- Not applicable
- Dual citizenship
- Permitted
- Requirements
- qualify for the 4-year FIG regimeemployment duties genuinely performed outside the UKelection made on the tax returnrelief limited to the lower of 30% of qualifying employment income or GBP 300,000 per qualifying year
What can go wrong
- The GBP 300,000 / 30% cap is new. It lands hardest on the highest earners, the people for whom the relief was previously most valuable.
- Eligibility is now bolted to the FIG regime, so the 10-year prior non-residence test applies. Anyone who fails FIG fails OWR.
- Transitional protection exists for people already claiming before 6 April 2025. They can claim to the end of their third tax year, and the cap does not apply to them. That grandfathering is worth confirming before restructuring anything.
- Relief is by election and needs robust workday evidence. HMRC scrutiny of day-counts is well established.