Overseas Workday Relief & Detached Duty Relief
Overseas Workday Relief
If you have moved to the UK recently but perform some of your work outside the UK, then you may be able to exclude the earnings relating to those foreign duties from UK tax, by using Overseas Workday Relief (OWR).
To qualify for OWR you must satisfy the following requirements:
The foreign earnings must not be remitted to the UK, which means that it is important that you receive this income to a foreign (non-UK) bank account (for example in the Channel Islands).
Please see our separate pages for more information on domicile and the remittance basis.
The OWR rules also apply to bonuses and stock-based compensation. Note that claiming OWR in connection with share awards will affect the treatment of the sale of the shares if they are subject to UK tax in a later year.
For more information see HMRC page: https://www.gov.uk/government/publications/rdr4-overseas-workday-relief-owr/overseas-workday-relief-rdr4
Detached Duty Relief
If you have moved to the UK as part of an assignment by a foreign employer, then you may be able to claim relief on your housing, travel and subsistence expenses related to your time in the UK under rules concerning a “temporary workplace” (also known as Detached Duty Relief). To qualify for the relief you must not be considered to have started a new job in the UK and the expectation must be that the assignment or secondment to the UK will not exceed 24 months. If at any point in the 24 month period the intention becomes to stay for longer than 24 months the relief is withdrawn from that point.
The claimable expenses are limited to those relating to the employee only, not costs for the whole family, and those costs need to be “reasonable”.
For more information see HMRC page: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim77010
If you have moved to the UK recently but perform some of your work outside the UK, then you may be able to exclude the earnings relating to those foreign duties from UK tax, by using Overseas Workday Relief (OWR).
To qualify for OWR you must satisfy the following requirements:
- you’re not domiciled in the UK throughout the year
- you’re taxed on the remittance basis
- your duties of employment are carried out wholly or partly outside the UK, and that year is either:
- the first tax year immediately after 3 consecutive tax years you were not resident in the UK
- one of the next 2 tax years after such a year
The foreign earnings must not be remitted to the UK, which means that it is important that you receive this income to a foreign (non-UK) bank account (for example in the Channel Islands).
Please see our separate pages for more information on domicile and the remittance basis.
The OWR rules also apply to bonuses and stock-based compensation. Note that claiming OWR in connection with share awards will affect the treatment of the sale of the shares if they are subject to UK tax in a later year.
For more information see HMRC page: https://www.gov.uk/government/publications/rdr4-overseas-workday-relief-owr/overseas-workday-relief-rdr4
Detached Duty Relief
If you have moved to the UK as part of an assignment by a foreign employer, then you may be able to claim relief on your housing, travel and subsistence expenses related to your time in the UK under rules concerning a “temporary workplace” (also known as Detached Duty Relief). To qualify for the relief you must not be considered to have started a new job in the UK and the expectation must be that the assignment or secondment to the UK will not exceed 24 months. If at any point in the 24 month period the intention becomes to stay for longer than 24 months the relief is withdrawn from that point.
The claimable expenses are limited to those relating to the employee only, not costs for the whole family, and those costs need to be “reasonable”.
For more information see HMRC page: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim77010
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