Overseas Workday Relief and RSUs: UK tax guide for tech professionals
How to claim Overseas Workday Relief (OWR) and correctly apportion cross-border RSUs and employee stock purchase plans for international tech workers in the UK.
Short answer: International tech professionals, software engineers, and executives relocating to the UK can significantly reduce their UK Income Tax using Overseas Workday Relief (OWR). OWR allows qualifying employees to exempt the portion of their employment earnings relating to overseas business duties performed outside the UK. For cross-border equity, Restricted Stock Units (RSUs) and stock options must be apportioned according to UK workdays between the grant date and vesting date.
Key points
- Overseas Workday Relief (OWR) exempts earnings from foreign duties during your first 3 UK tax years.
- Salary relating to overseas duties must be paid directly into a qualifying unremitted offshore bank account.
- RSUs and equity compensation must be apportioned based on UK vs non-UK workdays across the vesting period.
- The 4-year Foreign Income and Gains (FIG) regime replaces traditional non-dom remittance basis rules.
- Detailed travel records and flight documentation are essential to defend OWR claims during HMRC compliance audits.
How Overseas Workday Relief protects international tech earnings
For tech professionals, engineering managers, and executives relocating to London or UK tech hubs from hubs like Silicon Valley, Zurich, Berlin, or Singapore, UK income tax rates of 40% and 45% represent a steep cost.
Overseas Workday Relief provides substantial tax relief for employees who travel overseas for business. If 30% of your working days during the tax year are spent conducting meetings, attending conferences, or coding abroad, 30% of your qualifying salary can be exempt from UK Income Tax.
Vesting RSUs or travelling abroad for work?
Matthew calculates your exact workday apportionment, structures your OWR claims, and files your UK Self Assessment return to ensure tech equity awards are taxed accurately without overpaying.
Calculating cross-border RSU apportionment at vesting
When Restricted Stock Units (RSUs) or Employee Stock Purchase Plan (ESPP) shares vest, payroll departments frequently default to withholding maximum UK tax on 100% of the value because they lack your international travel log.
The statutory formula requires multiplying the market value of the shares at vest by your UK workdays over the total grant-to-vest period:
- Grant-to-Vest Period: Count the total working days between the original grant date and the exact date of vesting.
- UK Workday Fraction: Identify every working day performed within the UK during that specific period.
- Excess Withholding Reclaim: If your employer withheld tax on 100% of the grant, Matthew claims a repayment of the excess tax withheld via your Self Assessment tax return.
Transitioning into the 4-year FIG regime
Following fundamental changes to UK non-domiciliary rules, the government introduced the 4-year Foreign Income and Gains (FIG) regime. Under these rules, individuals who have been non-UK tax resident for at least 10 consecutive tax years can enjoy 100% UK tax relief on foreign income and gains for their first 4 years of UK tax residence, with modernized OWR provisions.
Frequently asked questions
What is Overseas Workday Relief (OWR)?
Overseas Workday Relief is a statutory tax relief under Section 26 of ITEPA 2003 for qualifying non-domiciled employees (and eligible leavers under the new FIG regime) who move to the UK. It enables you to pay UK tax only on earnings relating to UK workdays, exempting pay for workdays performed abroad, provided the funds remain unremitted outside the UK.
How do RSUs get taxed if I lived in multiple countries between grant and vest?
Cross-border equity is apportioned on a time-apportionment basis. Under OECD principles and Section 41F of ITEPA 2003, the taxable gain at vest is multiplied by the ratio of UK workdays to total workdays between the date of grant and the date of vesting.
What bank account is required to claim Overseas Workday Relief?
Under the pre-2025 remittance rules, salary had to be paid directly into an offshore qualifying bank account designated under Section 809Z8 ITA 2007. Under the new 4-year FIG regime, relief applies to qualifying employment duties performed overseas during the first 4 years of UK tax residence without complex remittance restrictions.
Does employer National Insurance apply to cross-border RSUs?
Yes, UK employer and employee Class 1 National Insurance Contributions (NIC) typically apply to the UK-apportioned portion of readily convertible assets (such as public company shares) on the vesting date, unless an international social security certificate (A1 or Certificate of Coverage) applies.
Written and reviewed by Matthew S Manderson CTA ATT AMIT
Chartered Tax Adviser (CTA), Association of Taxation Technicians (ATT), Association of Malta International Taxation (AMIT). General guidance only; tax treatment depends on individual facts.