- Patrick Maflin
Many UK yacht crew are aware by now that they are able to take advantage of filing tax returns under the Seafarers Earnings Deduction (SED) claiming 100% tax relief on their income from yachting. What many crew may not be aware of is that once you have become a UK tax resident, you are then eligible to make the most of your earnings by investing in ISAs which provide a tax free wrapper around savings and investments.
However if you leave your money in an offshore account providing 0% interest you are effectively losing money since it is not tracking in line with inflation. It's imperative to look at the various savings plans and ISAs prove to be a very safe option.
The UK government sent out a strong message about the importance of ISA’s in the future of personal savings when it announced that the annual allowance would increase to £20,000 from April 2017. This presents a great opportunity for yacht crew who wish to maximise their tax-free investments.
Before the end of this tax year however, there is the opportunity to shelter up to £15,240 in an ISA, with no further tax to pay on income and growth free from Capital Gains Tax. Yet the majority of ISA savers still fail to make the most of the opportunity.
Despite the poor returns savers have suffered for many years, over 52% of ISA funds – that’s over £270 billion¹ – are still held in cash. Average rates of interest are the lowest ever recorded². The introduction of the Personal Savings Allowance has exerted even more downward pressure on Cash ISA rates, and raised more questions over the value of using valuable ISA allowances as a home for cash.
The tax benefits of your ISA allowance can only be maximised by investing for the long term in assets offering the scope for attractive levels of income and capital growth.
Our preferred advisers, St. James’s Place, manage £14.2 billion of ISA investments on behalf of their clients. Through the combination of their distinctive investment approach and a complete picture of your attitude to risk and long-term financial goals, they can help you create a diversified ISA portfolio that can 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 us on the link below:
Any advice in this publication 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 matters herein.