Overseas Workday Relief Under the New Rules: What Inbound Executives and Their Employers Need to Know

The old Overseas Workday Relief was a creature of the remittance basis: relief depended on where the money went, and earnings had to be received offshore and stay there. Both died together on 6 April 2025. The replacement, which HMRC's SA109 notes also call Foreign Employment Relief, is a standalone statutory relief within the new residence-based system, and GOV.UK confirms relief is now available whether the income is received in a UK or an overseas bank account, and that income received offshore can be remitted to the UK without a charge (Overseas Workday Relief, GOV.UK).

The headline features of the new regime are these:

• Available for up to four consecutive tax years to qualifying new residents, the same population as the FIG regime.
• No requirement to keep earnings offshore: relieved pay can be banked in the UK or brought to the UK freely.
• A new annual financial limit: the lower of 30% of qualifying employment income for the year and £300,000.
• A formal two-step process on the Self Assessment return: an OWR election, then a quantified claim, both on the SA109.
• The election costs your Personal Allowance and CGT annual exempt amount for that year, exactly as a FIG claim does.

Transitional provisions protect earlier arrivers. If you became UK resident before 6 April 2025 and claimed OWR with a remittance-basis election in 2023/24 or 2024/25, you can continue into the new regime as a qualifying new resident, and transitional claims are not subject to the financial limit at all. Someone whose only OWR claim was for 2022/23 gets no further relief (GOV.UK).

OWR eligibility is welded to the FIG regime's qualifying new resident test. You qualify for a tax year if you are UK resident under the Statutory Residence Test, the year is one of your first four tax years of UK residence, and you were non-UK resident for at least 10 consecutive tax years immediately before your first year of residence. Members of the House of Commons or House of Lords are excluded (RFIG44000, HMRC).

Two consequences follow. First, for anyone arriving from 6 April 2025 the gateway is shared: if you qualify for the FIG regime you qualify for OWR, and vice versa. The one exception is transitional claimants, who qualified under the pre-2025 rules and can continue their OWR claims without meeting the 10-year test. Second, all the FIG regime's traps apply equally here. The four-year window is fixed from your first year of UK residence, a split year of arrival burns a full year of it, and a single UK-resident year inside the prior 10-year run breaks the sequence. Our guide to FIG deadlines by arrival year maps the window for each cohort, and the same map governs OWR.

After the four years are used, HMRC confirms you would need another 10 consecutive years of non-residence before qualifying again (GOV.UK). In practice it is a once-per-career relief, worth claiming properly.

OWR relieves UK tax on qualifying foreign employment income: broadly, earnings that are not in respect of duties performed in the UK. The extent to which earnings relate to overseas duties is determined on a just and reasonable basis (EIM43565, HMRC). For most executives that means a workday apportionment: if 40 of your 220 workdays in the year were spent performing duties in New York, Singapore and Frankfurt, roughly 40/220ths of your earnings for the year are candidates for relief, subject to the financial limit.

The relief is not confined to base salary. HMRC's overview confirms it extends to earnings and amounts treated as earnings, and to qualifying foreign third party income and qualifying foreign securities income, so bonuses and employment-related securities income can carry an overseas element too (EIM43555, HMRC). For a senior hire with equity in the package, the securities analysis is often where the real money sits, and it is also where DIY claims most often go wrong.

Because the offshore-account requirement is gone, the old choreography of dedicated offshore payroll accounts is no longer needed. Your employer can pay your full salary into your UK current account and the overseas portion still qualifies. What matters now is not where the money lands but whether the workday evidence supports the apportionment.

The new regime introduces a cap the old rules never had. For each qualifying year, relief is limited to the lower of 30% of the qualifying employment income for the year and £300,000 (Overseas Workday Relief, GOV.UK). The SA109 notes put the same test in box terms: box 47 is the maximum relief available, being the lower of 30% of the qualifying employment income entered in box 44 and £300,000, and the amount claimed in box 48 cannot exceed it.

The 30% arm bites first for anyone earning up to £1 million: at £400,000 of qualifying employment income the cap is £120,000, so an executive spending more than about 30% of workdays abroad hits the ceiling. Above £1 million the £300,000 arm takes over. The cap is annual, so the timing of bonuses and vesting across the four qualifying years can move real money: relief lost to the cap in one year is not carried anywhere.

The one group outside the cap is transitional claimants. If you qualify under the transitional provisions for pre-6 April 2025 arrivers, the SA109 notes direct you to tick box 43 and leave box 47 blank, because the financial limit does not apply to you (SA109 notes 2026, GOV.UK).

OWR is never automatic. The new regime requires two deliberate steps, both taken on the SA109 residence pages of the Self Assessment return: an OWR election, and then a claim for relief that quantifies the numbers. A claim without an election is invalid, and the SA109 notes for 2025/26 spell out the boxes (SA109 notes 2026, GOV.UK).

Timing matters twice. The election and claim must be made in the Self Assessment return by the anniversary of 31 January following the end of the tax year, so for 2025/26 the final date is 31 January 2028 (EIM43585, HMRC). But the 2025/26 return itself is due by 31 January 2027, so in practice the claim belongs in the return being filed this season. And because it lives on the SA109, it cannot be filed through HMRC's free online service: you need commercial software or an agent, or paper by 31 October.

The election has a price. By making it you give up the Personal Allowance and the CGT annual exempt amount for the year of election, and HS266 confirms the consequences are identical to those of a FIG income or gains claim (HS266, GOV.UK). For most OWR candidates this costs little: anyone with income over £125,140 has no Personal Allowance anyway. But on a modest package with few overseas workdays, run the arithmetic before electing.

HMRC's standard for the overseas apportionment is just and reasonable, which is deliberately not a formula. In practice the only apportionment that is safely just and reasonable is one built on contemporaneous records: if HMRC enquires into a 2025/26 return in 2027, a claim reconstructed from memory is the weakest possible position.

For each qualifying year we recommend keeping:

• A day-by-day workday calendar recording where duties were performed, kept as the year runs, not rebuilt in January.
• Travel evidence: flight and rail bookings, boarding passes, hotel invoices and taxi receipts that corroborate the calendar.
• Diary and meeting records showing what work was done on overseas days, since the test is where duties were performed, not merely where you woke up.
• Employment contracts and assignment letters showing the international scope of the role.
• Payslips, bonus letters and equity statements supporting the box 44 and box 46 figures, including the split-year attribution in an arrival year.

Half-days, travel days and days worked in transit all need a consistent, defensible treatment, decided once and applied throughout. The same evidence discipline applies across the whole return: our guide to FIG regime record keeping covers the parallel records for the income and gains side of the claim.

OWR and the FIG regime are siblings, not substitutes, and the boundary between them is sharp. Foreign employment earnings are excluded from the FIG foreign income claim: HS266 is explicit that relevant foreign earnings do not qualify for FIG relief and that OWR is the route for them (HS266, GOV.UK). An executive who ticks the box 28 foreign income claim and assumes it covers overseas workdays has claimed nothing on their salary. Salary needs boxes 40 and 41; dividends, interest and gains need boxes 28 and 29, quantified source by source on the supplementary pages, as our SA109 walkthrough explains.

The good news is that the costs do not stack. The lost Personal Allowance and CGT annual exempt amount are the price of entry for the year, whether you make a FIG claim, an OWR election, or both. For a typical inbound executive with foreign investment income and overseas workdays, the rational answer is usually both together: the allowances are already gone, so every additional pound of relief is pure saving.

Arrival years add one more layer. Most people arrive mid-year and claim split-year treatment, so only post-arrival income is within UK tax at all. For OWR, any attribution of earnings required for a split year is done on a just and reasonable basis (EIM43565, HMRC), and the relief then applies to the overseas duties within the UK part. Remember also that RFIG44000 confirms split-year treatment is disregarded when determining qualifying new resident status: a split arrival year still counts as a full year of the four, so the window is spent from day one (RFIG44000, HMRC).

Take an executive who moved to London on 1 September 2025 to lead a bank's EMEA desk, after 12 years in Singapore. She is a qualifying new resident, 2025/26 is a split year of arrival, and her qualifying employment income after deductions for the UK part of the year is £350,000. Her calendar shows 130 workdays from arrival to 5 April 2026, of which 26 were spent performing duties in Singapore, Dubai and New York.

The claim sits comfortably within the £105,000 cap, so the full £70,000 is relieved, saving £31,500 at the additional rate. The election costs her nothing meaningful: her income extinguished the Personal Allowance regardless, and she was making a box 28 FIG claim on her Singapore investment income anyway, which carries the same allowance consequences. In a full UK year the same calendar discipline supports a larger claim, with the 30% cap as the number to watch.

Now the counterfactual. Without the election, the £70,000 is simply taxed: £31,500 gone. With an election but a claim HMRC can unpick because the workday log was invented in January 2027, the outcome is worse than paying the tax: repaid relief, interest, and a return that invites questions about every other entry, in the first FIG filing season when HMRC is seeing these claims for the first time.

Arrival-year returns with OWR and FIG claims together are exactly the returns Horizon UK Tax Solutions specialises in. The practice is founder-led by a Chartered Tax Adviser (CTA) with over 10 years experience, including 7 at a Big Four firm. We confirm qualifying new resident status against your full residence history, run the claim-or-not arithmetic, build the workday apportionment on evidence, complete the SA109 election and claim boxes with the FIG claims alongside, and file through professional software before the deadline.

Fees are fixed and agreed upfront, so there is no clock running while we untangle a split-year arrival. Personal tax returns start from £350, non-resident and expat returns from £550, and complex returns, which is where most OWR and FIG combinations sit, from £750. If you are an employer with several inbound hires, we can standardise the process across the population.

If you arrived in the UK recently, or are planning a move, the cheapest step is a conversation before anything is filed. Book a free 30-minute clarity call, or see our non-dom and residency services for how we handle the wider arrival-year picture.