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Overseas Workday Relief (OWR) Under UK Tax Rules: Changes from April 2025.
Introduction
The UK’s non-dom tax regime is undergoing significant reforms from 6 April 2025, affecting Overseas Workday Relief (OWR)—a key tax break for foreign workers. This guide explains:
✔ What OWR is and who qualifies
✔ How the new 4-year Foreign Income & Gains (FIG) regime replaces OWR
✔ Transition rules for existing non-doms
✔ Key planning considerations
What is Overseas Workday Relief (OWR)?
OWR allows non-UK domiciled employees to exclude foreign employment income (from overseas workdays) from UK tax—if not remitted to the UK.
Key Features (Current Rules – Before April 2025)
✅ Available for first 3 tax years of UK residence
✅ Non-domiciled status required (not deemed domiciled)
✅ Only applies to work performed outside the UK
✅ Must claim the remittance basis (no automatic relief)
Example: A banker working 100 days in New York and 150 days in London pays UK tax only on the UK workdays—if they don’t bring overseas earnings into the UK.
Major Changes from April 2025
The UK is abolishing the non-dom regime and replacing it with a 4-year Foreign Income & Gains (FIG) system.
1. OWR Replaced by 4-Year FIG Regime
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New arrivals (from April 2025) get automatic tax exemption on foreign income & gains for first 4 years.
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No need to claim the remittance basis—unlike OWR.
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Overseas work income remains untaxed if not remitted (similar to OWR but with extended relief).
2. Transition Rules for Existing Non-Doms
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If you already claimed OWR before April 2025, you can continue until your 3-year period ends.
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After that, you may qualify for the remaining years under the new 4-year FIG regime.
3. No More Long-Term Non-Dom Benefits
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Deemed domicile (15/20-year rule) abolished—everyone taxed on worldwide income after 4 years.
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No remittance basis claims beyond the 4-year period (except for protected trusts).
What Should You Do?
For New Arrivals (Post-April 2025)
✔ Track overseas workdays carefully—UK workdays remain taxable.
✔ Keep foreign earnings outside the UK to retain tax benefits.
For Existing OWR Claimants
✔ Check if you can extend relief under the new FIG regime.
✔ Review double tax treaties to minimise liabilities.
Conclusion
The end of OWR marks a major shift in UK tax policy, with a simpler 4-year FIG regime replacing it. While new arrivals get an extra year of relief, long-term non-doms lose permanent tax advantages.
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