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The maximum amount of relief available to be included in an OWR claim for relief for a tax year is determined by section 41Q ITEPA 2003. However, this is subject to the financial limit in section 41R ITEPA 2003.Ìý

The extent to which employment income qualifies for OWR continues to broadly depend on the tax year in which this employment income was earned or to which it otherwise relates. This means that employment income may be charged to tax in a different tax year to the one in which it was earned, or to which it relates.Ìý As a result, employment income which was earned in, or which relates to, a qualifying year may be charged to tax in more than one tax year.ÌýÌý

Where employment income earned in, or which relates to, a qualifying year for which an OWR election has been made is charged to tax in more than one tax year, an OWR claim for relief may be made in each tax year this income is charged to tax.Ìý

Relief in a tax year is available on the amount of qualifying foreign employment income charged to tax in that tax year.ÌýÌý

This means that an employee can make more than one OWR claim for relief in their Self-Assessment tax return for a tax year, if qualifying foreign employment income which relates to more than one qualifying year is charged to tax in that tax year.Ìý

ExampleÌý

Naoimh is a qualifying new resident for 2025-26 and 2026-27. Naoimh works both within and outside the UK in both tax years and makes an OWR election in her ITSA returns for both 2025-26 and 2026-27. Ìý

Naoimh receives £500,000 employment income in 2026-27 which relates to duties performed in that tax year. £150,000 of this is qualifying foreign employment income.ÌýNaoimh alsoÌýreceives a bonus which relates to duties performed in 2025-26 of £100,000 in 2026-27, so that it is taxable in 2026-27. £25,000 of the bonus is qualifying foreign employment income. Ìý

As Naoimh has made an OWR election for both 2025-26 and 2026-27, she can make an OWR claim for relief on qualifying foreign employment income for each year which is charged to tax in 2026-27 in her tax return for that year. This means that subject to the financial limit (see EIM43600), Naoimh can make an OWR claim for relief for £25,000 for 2026-27 and an OWR claim for relief for £150,000 for 2026-27. The total relief claimed will be £175,000, but this will require Naoimh to make two separate claims for relief in her return for 2026-27. She cannot make a single OWR claim for relief for £175,000 as the income relates to two different qualifying years.

Qualifying foreign employment income means:

• qualifying foreign general earnings (see EIM43565)
• qualifying foreign third party income (see EIM43570), and
• qualifying foreign securities income (see EIM43575).