EIM43560 - Globally mobile employees: Overseas Workday Relief: eligibility
From 6 April 2025 eligibility for the new OWR regime in a tax year will be based on an employee's residence for that tax year, and whether, subject to certain transitional provisions (see EIM43605), they are eligible for the 4-year FIG regime for that tax year. It will be sufficient that the employee is eligible for the FIG regime for a tax year, they do not need to make a claim for relief under this regime in order to be eligible for OWR.
An employee is eligible for the FIG regime for a tax year if they are a qualifying new resident for that year. 'Qualifying new resident' is defined in section 845B ITTOIA 2005 as an individual who is UK resident for a tax year, and who was not a UK resident at any point for any of the 10 tax years immediately preceding that tax year. Additionally, an individual who is a qualifying new resident because they became UK resident for a tax year will continue to be a qualifying new resident in any of the next three tax years for which they are UK resident, so that individuals can be qualifying new resident for up to four tax years. See RFIG44000 for further guidance.
A foreign employment election enables an employee to make an OWR claim for relief on their qualifying foreign employment income for that qualifying year in any tax year it is charged to tax.
You cannot be a qualifying new resident if you are a disqualified individual. A disqualified individual is an individual who is a member of the House of Commons or the House of Lords for any part of that tax year.
An employee can be eligible for OWR more than once in their lifetime provided the 10 year rule of non-residence is met between periods of UK residence.
Domicile is no longer a factor in determining eligibility for OWR. An employee who would have formerly held a UK domicile of origin would be entitled to this relief, provided the 10 year non-residence condition was met prior to a period of UK residence.
Example
Jacob was UK resident for 2013-14 and left the UK on 5 April 2014, becoming non-UK resident from 2014-15 onwards. Jacob returned to the UK on 6 April 2025, becoming UK resident for 2025-26.
As Jacob had a period of 10 years duing which he was non-resident before 2025-26 he is a qualifying new resident in 2025-26 and will be entitled to make an OWR election for 2025-26.
If Jacob had instead remained UK resident until 2016-17 and become non-UK resident from 2017-18 onwards, he would not be a qualifying new resident for 2025-26. If he remained non-UK resident for each tax year from 2017-18 to 2026-27 and then became UK resident for 2027-28, he would then be a qualifying new resident in that tax year.