Posted: 18th March 2017 | Written by: Patrick Maflin
Many UK yacht crew are aware that they can file tax returns under the Seafarers Earnings Deduction (SED) and claim 100% tax relief on their income from yachting. What many crew may not know is that once you become a UK tax resident, you are also eligible to invest your earnings in ISAs (Individual Savings Accounts) providing tax advantages on savings and investments.
If you leave your money in an offshore account providing 0% interest you're effectively losing money as it doesn't grow in line with inflation, and the various savings plans and ISAs available can provide a safe alternative.
The UK government is promoting the importance of ISAs as part of a personal savings plan and has announced that the annual personal allowance will increase to £20,000 from April 2017. This is a great opportunity for yacht crew to maximise their tax-free investments.
Don't Miss Out on the ISA Opportunity!
Up until the end of this tax year, there is still the opportunity to shelter up to £15,240 in an ISA, with no further tax to pay on income and no Capital Gains Tax on growth. Still many existing ISA savers fail to make the most of this opportunity!
Despite poor returns on savings in recent years, over 52% of ISA funds (over £270 billion) is still held in cash. Average rates of interest are the lowest ever recorded and the introduction of the Personal Savings Allowance has placed even more downward pressure on Cash ISA rates, raising questions over the value of using ISA allowances as a home for cash.
Ultimately the tax benefits of your ISA allowance can only be maximised by investing for the long term. Our preferred advisers, St. James’s Place, who manage £14.2 billion of ISA investments, will review your long-term financial goals and your attitude to risk to help you create a diversified ISA portfolio to stand the test of time.
If you would like to find out more about making the most of your ISA allowance before 5 April, please contact Patrick Maflin at Marine Accounts.
Any advice in this article is not intended or written by Marine Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters herein.
About Marine Accounts
Marine Accounts provides specialist tax advice and mortgages to crew working on superyachts. With offices in the US, UK, AUS & NZ we work directly with lenders who understand the unique financial position of seafarers and the relevant tax laws worldwide.