Employees moving to the UK will benefit from an improved overseas workday relief system starting on 6th April 2025.
Current System
Under the current overseas workday relief system, employees can claim tax exemption on earnings from overseas duties if they:
- Are not UK-domiciled.
- Use the remittance basis.
- Do not remit earnings to the UK.
This relief lasts for up to three tax years.
Changes from 6th April 2025
From 6th April 2025, the system will shift to a residence-based model, replacing domicile and the remittance basis. Employees who qualify as new residents can claim relief if they:
- Were not UK residents for the ten consecutive tax years before arrival.
- Submit a claim each year for up to four tax years after arriving.
This claim exempts overseas earnings from UK tax, whether remitted to the UK or not.
Relief Limits
The maximum relief per tax year is the lower of:
- £300,000
- 30% of the employee’s worldwide employment income
Other Considerations
Claiming overseas workday relief removes entitlement to the income tax personal allowance and capital gains tax exemption, just as under the current system.
HMRC’s technical note on non-UK domiciled taxation, including overseas workday relief (pages 12-16), is available here.
About the author
