Overseas workday relief
Overseas workday relief can reduce your UK tax liability in certain circumstances where you work overseas.
Please note: At the Spring Budget 2024, the government announced significant changes for UK-resident taxpayers to the taxation of non-UK income and gains arising from April 2025. The taxpayer’s domicile and the remittance of such income and gains to the UK will no longer be relevant in determining the UK income tax liability. Instead, taxpayers will be able to exclude such income and gains from UK tax for a limited period, where certain conditions are met. The information below sets out the position for the 2024/25 tax year.
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Residence requirements
For tax years up to and including 2024/25, if you are non-UK domiciled and coming to work in the UK and have not been resident in the UK for any of the three previous consecutive UK tax years, you may be able to claim tax relief for earnings relating to your overseas workdays in your first three tax years of UK residence.
Further conditions
This relief is available for taxpayers who claim the remittance basis of taxation and where the earnings relating to their overseas workdays are paid and retained overseas. Such earnings are then taxable in the UK only to the extent they are remitted to the UK.
There are specific conditions that must be met in order for the relief to apply and we would strongly advise you to read HMRC’s guidance if you wish to claim this relief and seek professional advice.
In particular, you should be aware that the rules regarding what is deemed to be remitted to the UK from a bank account containing more than one type of income are complex. There are simplified rules available if you set up a qualifying account in advance of receiving your first salary payment.
