UK tax risks for non dom footballers temporarily leaving the UK: the impact of the FIG regime and restricted Overseas Workday Relief

Introduction

Temporary overseas moves are highly common in professional football. Premier League players frequently move abroad on loan, while others might transfer out of the UK but return shortly afterwards — sometimes within the next summer transfer window.

Historically, such moves were widely perceived as tax‑efficient, or at least tax‑neutral, for non‑UK domiciled players (that is, broadly speaking, non-UK national players). Provided offshore earnings were not remitted to the UK, foreign employment income could usually be sheltered from UK tax under the remittance basis.

However, fundamental changes introduced from 6 April 2025, through the abolition of the remittance basis and its replacement with the Foreign Income and Gains (FIG) regime, have significantly altered this position. In particular, the interaction between the FIG regime and restricted Overseas Workday Relief (OWR) has created a material new UK tax exposure for non-UK domiciled players leaving the UK only temporarily.

This article examines how those changes affect non‑dom footballers who leave the UK on a short‑term basis and return soon afterwards, and why this scenario increasingly results in unexpected UK ‘top‑up’ tax liabilities.

The common football fact pattern

The typical scenario is familiar across elite football:

• A non‑UK domiciled footballer becomes UK tax resident while playing for a UK club.
• The player transfers or goes on loan to a foreign club.
• Salary earned overseas is taxed locally.
• The player returns to the UK within one or two transfer windows.
• UK tax is only analysed once the player has returned.

The underlying assumption is often that UK tax residence ends on departure, or that foreign salary remains protected provided it is not brought to the UK. Under the FIG regime, that assumption is frequently wrong.

The pre‑2025 position: remittance basis planning

Before 6 April 2025, non‑dom footballers who remained UK tax resident during temporary overseas spells could often rely on the remittance basis to exclude foreign employment income from UK tax, provided:

• The employment duties were performed outside the UK, and
• The income was not remitted to the UK.

Although residence and treaty analysis still mattered, UK domestic legislation often provided a practical and relatively robust exemption for short‑term overseas earnings. Players moving to countries with a lower rate than the UK would therefore benefit from simply paying that lower rate of tax.

This historical backdrop is important, as many players, agents and clubs continue to approach overseas moves with this position in mind.

The FIG regime: a major shift for employment income

From 6 April 2025, the remittance basis was replaced by the FIG regime for individuals who become UK tax resident after at least ten consecutive tax years of non‑UK residence.

While the FIG regime allows qualifying individuals to exempt certain categories of foreign income and gains for a limited four‑year period, employment income is explicitly excluded from automatic relief.

The only potential relief for foreign employment income within the FIG regime is through OWR, which has been retained but in a significantly restricted form. Whilst still referred to as OWR in this article, it is technically a different foreign employment income relief entirely, existing under the new regime completely separately to the OWR previously available under the remittance basis.

OWR under the FIG regime

OWR now operates in a far narrower way than under the previous regime:

• OWR can only be claimed within the individual’s four‑year FIG period.
• Relief is subject to an absolute cap of £300,000 of employment income per tax year.
• Any foreign employment income in excess of that cap is fully taxable in the UK if the individual is UK resident.

For professional footballers, whose overseas salaries commonly far exceed this threshold even during short loan spells, this restriction is often decisive.

As a result, foreign salary that was previously capable of full exemption can now only be partially relieved, with the balance falling squarely into the UK tax net.

UK tax residence and the “return too soon” problem

Whether OWR matters at all depends first on whether the player will cease to be UK tax resident, as determined under the Statutory Residence Test (SRT).

In principle, split‑year treatment can limit UK tax exposure where an individual leaves the UK to work full‑time overseas. However, split‑year treatment is fragile and will fail if, among other things:

• The player returns to the UK too quickly,
• The overseas employment does not meet the full‑time work conditions, or
• The player re‑enters UK employment within the relevant period.

Where split‑year treatment fails, the player may remain UK tax resident throughout the period abroad, bringing overseas salary into the scope of UK income tax when the player returns to the UK.

Partial OWR relief and the UK ‘top‑up tax’

Where a footballer remains UK tax resident during a temporary overseas move, the tax outcome is often misunderstood. While OWR may provide limited relief, it will now rarely eliminate UK tax exposure entirely.

Worked example: loan to Turkey

Consider the following example:

• A UK‑resident non‑dom footballer goes on loan to a Turkish club.
• The loan spans two UK tax years.
• Total salary earned during the loan: £5 million.
• Turkish upper income tax rate: 40%.
• UK additional rate of income tax: 45%.

Assuming OWR is available in both tax years, the player may exempt:

• £300,000 in year one.
• £300,000 in year two.

Total OWR exemption: £600,000.

This leaves £4.4 million taxable in the UK.

Although foreign tax credit relief will be available for Turkish tax paid, the UK tax on this income is calculated at rates of up to 45%. With Turkish tax suffered at 40%, the player faces a UK ‘top‑up’ tax of c.5% on the UK‑taxable portion.

In pure cash terms:

• c.5% × £4.4 million = c.£220,000 of additional UK tax.

This liability arises despite the fact that:

• The duties were performed wholly outside the UK, and
• A substantial amount of foreign tax has already been paid.

Clearly if players move to countries with much lower or zero tax rates expecting a significant tax benefit, the problem is much worse.

The position where OWR is unavailable

In some circumstances, OWR may not be available at all. This commonly occurs where:

• The player has already exhausted their OWR entitlement in earlier UK tax years, or
• The timing of UK residence prevents a valid OWR claim from being made.

In such cases, none of the overseas salary can be exempted under UK domestic law. In the above example, this would result in the applicable UK ‘top-up’ tax increasing to c.£250,000 (c.5% x £5 million).

Where the loan or temporary transfer is to a low‑tax jurisdiction, the consequences can be severe. The full overseas salary may be taxable in the UK at rates of up to 45%, with relief limited to whatever (if any) foreign tax has been paid.

This is precisely the type of scenario now being seen in practice, where players are exposed to significant UK tax liabilities on income they assumed was “dealt with abroad”.

Jurisdictional risk: where tax rate differentials bite hardest

The risk of UK top‑up tax is most acute where overseas jurisdictions tax employment income at lower effective rates, including:

• Spain – non‑resident employment income often taxed at c.24%.
• Italy, France and the Netherlands – inbound regimes offering partial income exemptions.
• Saudi Arabia and Monaco – employment income generally not subject to tax.

In these cases, even where OWR is partially available, foreign tax credit relief often falls well short of the UK liability, leaving a substantial residual UK tax charge.

Can double tax treaties eliminate UK tax?

Where UK domestic legislation brings overseas salary into charge, attention turns to the relevant double tax treaty.

Although treaties frequently allocate primary taxing rights to the country where the employment is exercised, they often do not provide an automatic exemption from UK tax for UK residents. Full treaty protection generally depends on the player being:

• Domestically resident in the overseas jurisdiction, and
• Treaty resident there under the tie‑breaker provisions.

This analysis is highly fact‑sensitive and often turns on matters such as accommodation, day counts, and whether the player retains a home or centre of vital interests in the UK.

Treaties can be decisive — but they are not a reliable fallback in short‑term football moves and increase uncertainty about the tax consequences of a move.

Why loans are especially problematic

Loan transfers are often more dangerous from a UK tax perspective than permanent transfers because:

• They increase the likelihood of an early UK return,
• They jeopardise split‑year treatment,
• They rarely trigger sufficient overseas residence for treaty protection, and
• They are often negotiated without tax equalisation or gross‑up clauses.

As a result, players may unknowingly import significant UK tax liabilities back into the UK on their return.

Practical implications for players, agents and clubs

The post‑remittance basis environment requires a fundamental change in approach regarding non-UK domiciled players:

• Overseas moves must be analysed before departure, not retrospectively.
• Residence planning is now central to tax outcomes.
• OWR provides limited relief only, not a complete solution.
• Net pay expectations must factor in possible UK top‑up tax.
• Loan structures require particular care.

Failure to address these issues early can lead to substantial, unexpected liabilities and difficult conversations long after the move has been completed. Relationships can be jeopardised where agents and other advisers have negotiated excellent deals in good faith, but subsequent events result in a tax problem for the player.

Conclusion

The abolition of the remittance basis and the introduction of the FIG regime have fundamentally altered the UK tax position for non‑dom footballers temporarily leaving the UK.

OWR survives, but only as a partial and capped relief, and in many cases it’s unavailable altogether. Where players return to the UK after a short period of overseas work — particularly following loans or short‑term overseas spells — UK tax exposure on foreign salaries is now common.

For players and advisers, the message is clear: temporary overseas moves no longer mean temporary disengagement from UK tax for non-domiciled players. Proper analysis of residence, OWR availability, and jurisdictional tax rates is now essential to avoid costly surprises.

It should be noted that this is a complex area, and professional advice should always be taken. For more information, contact Pete Hackleton.