The statutory residence test—overseas workday relief
Produced in partnership with Lisa Spearman of Mercer & Hole

The following Private Client practice note produced in partnership with Lisa Spearman of Mercer & Hole provides comprehensive and up to date legal information covering:

  • The statutory residence test—overseas workday relief
  • What happens in the absence of OWR?
  • Conditions for relief
  • The employment condition
  • The residence condition
  • What are the consequences of OWR?
  • Interaction with split year rules
  • People already resident in the UK at 6 April 2013 and transitional rules
  • Transitional rules for individuals who were resident but not ordinarily resident in 2012/13
  • Other individuals
  • More...

The statutory residence test—overseas workday relief

Overseas Workday Relief (OWR) is a relief from UK income tax for certain non-domiciled individuals, who have elected to be taxed on the remittance basis, on their unremitted 'general earnings' from employment related to duties performed overseas.

As a result of the government’s changes to the taxation of non-domiciled individuals set out in Finance (No 2) Act 2017, a number of individuals who were previously regarded as non-domiciled under the UK tax rules, are now deemed UK domiciled for all tax purposes; meaning the remittance basis and OWR will no longer be available to them. See Practice Note: Deemed domicile for tax from 6 April 2017.

Prior to 6 April 2013, a similar arrangement to OWR was available on a non-statutory basis under HMRC statement of practice 1/09 (SP 1/09) for individuals who were resident in the UK for a short time only and were regarded as not ordinarily resident.

With effect from 6 April 2013, alongside the introduction of the statutory residence test for individuals (for which see Practice Note: The structure of the statutory residence test), the concept of ordinary residence was abolished and SP1/09 was brought on to a statutory footing, subject to various changes to the way in which earnings for overseas duties are treated. The new rules are referred to as Overseas Workday Relief and this Practice

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