Overseas workday relief and special mixed fund rules

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Overseas workday relief and special mixed fund rules
  • Introduction
  • Overseas workday relief
  • Who qualifies?
  • Interaction with deemed domicile rules
  • Apportionment of earnings
  • UK duties and overseas duties ― coronavirus (COVID-19)
  • Split years
  • Dual contracts
  • Special mixed fund rules
  • More...

Overseas workday relief and special mixed fund rules


Individuals who are resident but are not domiciled in the UK and undertake duties of employment both in the UK and overseas under a single contract of employment are entitled to favourable tax treatment for the first three years of residence which allows:

  1. 1)

    the earnings from the employment to be apportioned between UK and overseas duties on a days basis, with there only being a remittance from the bank account in (2) below for UK tax purposes if the total amount received in the UK plus the amount brought in to the UK from that bank account (which is attributable to employment income under the special mixed fund rules) exceeds the total 'UK portion' of the earnings. This is known as ‘overseas workday relief’ or ‘OWR’

  2. 2)

    an administrative relaxation of the rules on remittances from mixed fund rules in relation to the bank account where the individual deposits funds from the employment. This is known as the ‘special mixed fund rules’

The rules were changed from 6 April 2013 when the non-statutory practice (within SP 1/09) was codified as part of the introduction of the statutory residence test and the abolition of the concept of ordinary residence, which played a key part in the old rules. The current rules are discussed below. The old rules and the transitional provisions for tax years 2013/14 to 2015/16 are discussed in Simon’s Taxes E4.1317 and E4.1319.

Note that the detailed HMRC FAQ on the special mixed fund rules have been archived as part of the migration to the GOV.UK website. At the time of writing, it is understood that these FAQ still represent HMRC’s current view (although see the discussion below regarding the deemed domicile rules, which were introduced after the FAQ were produced) and that the guidance will be written back into the Residence Domicile and Remittance Basis Manual. To use the FAQ, you will need to scroll down the page,

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