OVERSEAS WORKDAY RELIEF - KEY CHANGES

ASESA Solutions Ltd - OVERSEAS WORKDAY RELIEF - KEY CHANGES

Overseas Workday Relief (OWR) is a UK tax rule that allows eligible individuals to claim exemption on income earned from duties performed overseas during the tax year. It is available to recent UK tax residents meeting specific Criteria. Normally, once you are UK tax resident, HMRC taxes your worldwide income, but OWR provides an exception.

From 6 April 2025, the UK's non-domiciled tax rules have been replaced with a residence-based system. As part of this shift, Overseas Workday Relief (OWR) is still available but under revised conditions.

Eligible individuals can now claim OWR on foreign income and gains as well as employment income and gains as well as employment income relating to duties performed outside the UK, provided they meet the new criteria.

Key changes include:

• New financial limits on relief

• Updated eligibility based on UK tax residence

• Transitional arrangements for those previously using non-dom status

• Stricter record-keeping requirements for claimants

Why This Matters?

The reform makes OWR easier to claim and available to more people, but limits the tax break for very high earners through the new cap.