I recently had this dilemma. I am on a three year fixed term contract at my school andhave another year to go. I was not actively job seeking as I know I have another year secured, but a job came up at a school that I have worked at before and it's just basically my dream, I was really unsure as to whether I should apply I was thinking about loyalty to my school etc, but after thinking about it I thought you know next year when I'm without a secure job, they are not going to be thinking about me and loyalty are they? Plus this is my dream job and jobs do not come up here very often this might be my only chance- it would be silly of my not to apply. I decided like you that I should let my head know that I was applying somewhere else as I didnt want it to be a surprise to her. My head is lovely she was so supportive and told me that she knew why I was applying and that she had been in my position before, she supports end encourages people progressing and developing professionally. I told her that I wasnt telling anyone else until the situation of me getting appointed as working for another year with people who knew I was thinking of leaving would be hell, the head understood and it was confidential. My head has even helped me with my application, she has been so amazing. I was worried for weeks about telling her but I am so glad I did now. I stressed that it wasn't anything negative about my school, that I do love it there and would be happy staying but I just needed to go for this opportunity. So only the head needs to know that you are applying and he cant hold it against you, so dont let it hold you back- Go for it! Good luck!!